(This series examines how politicians, pundits and other people of influence abuse words and use false logic labeling or doublespeak to distort public perceptions. Part I,  Propaganda and Plunder showed how even simple words like “clear” and “clean” were twisted to promote harmful policies. Part II, Socialism ≠ Social Disease, showed how the word “socialism” has been demonized by putative Conservatives – who I call Consumatives, since they’re more concerned with consumption than conservation. Part III, Grovering Government, examined the endlessly repeated falsehood that the government never does anything right. Part IV takes a brief look at healthcare history and exposes the outrageous actions of some who have profited from the present system and have a vested interest in defeating healthcare reform.)

Some have said it would be impossible to plan a healthcare system as bad as the one we have. We pay more per capita for healthcare than any other nation, yet by some measures of health, we are outranked by third-world countries. 

Close to fifty million Americans have no insurance coverage, and as many of the insured learn to their dismay when they have a serious medical problem, many – if not most – are under-insured.  In fact, more than three-fourths of personal bankruptcies due to medical problems are by persons who are insured. 

Yet we continue to depend on a largely privately funded healthcare system that operates, administratively at least, much as it did at the beginning of the last century, a time when life expectancy was under 50 and most babies were born at home.

Certainly, life expectancy and infant mortality statistics have improved since then, but there are many factors affecting that besides improved healthcare. And by one measure of health – obesity, particularly childhood obesity – we were far better off in 1900.

In all that hundred years, didn’t anyone consider an alternative?

A tale of two countries

In 1948, Britain was in terrible financial condition as a result of two world wars. Its capital London was in shambles, still suffering from the devastation wrought by the blitzkreig. Yet, in the same spirit of brotherhood that made possible their finest hour, the British launched a nationalized healthcare system.

Meanwhile on this side of the Atlantic, the incumbent president Harry Truman was almost defeated in the 1948 election for daring to integrate the military and daring to propose nationalized healthcare. (See my post George W. Bush, You’re No Harry Truman.)

Even in the euphoria that followed victory in World War II, the country that prided itself on being “the most Christian nation in the world” was not yet ready for brotherhood despite the enormous contribution of black servicemen in defeating Germany and Japan. Nor was America ready for a nationalized healthcare system.

Instead, this country opted for a system that covered healthcare through private insurance plans, often provided wholly or largely by employers. Initially, this system worked fairly well, especially when unions were strong. Healthcare coverage was made part of union contracts and insurance companies operated basically as mutual companies that were intended to spread risk.

But unions began to lose membership, going from one-third of the work force in 1945 to around 7.5% of the workforce in private industry today, and as union membership fell, so did their political influence. And as union influence fell, so did their ability to influence healthcare reform.

At the same time, insurance companies became more powerful and more politically well-connected. Small mutual companies became gigantic multi-national corporations like AIG, companies far more interested in finance than insurance, far more interested in profit than people.

The chief aim of these insurance giants was to maximize profits even if it meant denying claims and coverage, slow-paying bills, limiting tests and hospital stays, and otherwise interfering with good medical practice. In time, reserves intended to cover catastrophic losses were plundered to make bets at financial casinos in New York and London.

How did things get so screwed up? A decision made in 1973 was one pivotal point. 

Making himself perfectly clear

In 1973, President Richard Nixon pretended to do something about healthcare reform. But in actuality, he greased the skids for Health Maintenance Organizations (HMO’s). Here’s an excerpt from the transcript of the chilling Oval Office conversation between Nixon and John Ehrlichman about HMO’s:

Nixon: “You know I’m not too keen on any of these damn medical programs.”

Ehrlichman: “Edgar Kaiser is running his Permanente deal for profit. And the reason he can do it … all the incentives are toward less medical care … the less care they give them, the more money they make.”

Nixon: “Not bad.”

(see video or full transcript)

From this conversation, there can be little doubt Nixon, Ehrlichman, and others in the know clearly understood HMO’s were not what they were advertised to be – a private industry plan to hold healthcare costs down by promoting preventative healthcare. Though that was their ostensible purpose, their real aim was to hold down costs by denying healthcare. A substantial portion of the savings from the services not rendered would go to line the pockets of the owners of the HMO’s.

A continuing obscenity

That’s exactly what happened; and for thirty-five years, the government did nothing to rein in the scam. HMO’s denied benefits and passed on profits to company executives, as evidenced by this from a recent article in the Boston Herald:

“Data filed yesterday with the state’s Division of Insurance shows that Blue Cross Blue Shield of Massachusetts, the state’s largest HMO, doled out million-dollar pay packages to five executives, while Harvard Pilgrim Health Care paid its two highest-ranking executives a total of $2.7 million.”

This enormous compensation came despite the fact healthcare costs increased in Massachusetts. This is just one more example of the continuing obscenity that is executive compensation in America (the subject of a future post). It is becoming more and more obvious – at least to some – that growing income disparity and the corruption of corporate capitalism by greedy executives is a serious threat to this country.

The plague of privatization

Over the last three decades, the Coolidge dictum that the business of government is business became an orthodoxy bordering on an obsession. Even worse, True-Believers in this religion practiced what they preached and reduced government’s role to staying out of the way of businessmen.

In the process, government functions were trampled in a mad rush to privatization. In such a climate, there was no hope for serious healthcare reform.

Since Ronald Reagan viewed government as the problem not the solution, it’s not surprising he proposed no solution to rising healthcare costs. His hands-off approach and cavalier attitude was most noticeable in dealing with AIDS, and his willful ignorance in the face of that crisis may be the worst of his sins as president.

Bill Clinton made a brief attempt at healthcare reform, aided by Hillary Clinton who claimed it as her pet project. But it was soundly defeated by opposition from Republicans and a slick and expensive ad campaign financed by the insurance industry and other healthcare insiders.

The ads featured a fictional couple Harry and Louise who whined incessantly about losing “choice” – as if most people under an employee insurance plan had any real choice – and stoked fears about the costs of a new system. The ads were pure propaganda, but that didn’t stop them from being effective.

In the aftermath of that debacle, Republicans gained control of the House of Representatives. After that, any talk of healthcare reform was just that – talk.

Given his addiction to privatization, his dislike of government, and his general incompetence, there was little chance George W. Bush would attempt the hard work of healthcare reform. He did surprise many with his policies on AIDS, particularly in light of his idol Reagan’s tragic mishandling of that problem.

Send in the clowns

One of the plotters was Rick Scott, an attorney and founder of the inaptly named Conservatives for Patients' Rights – CPR (get it?). Scott’s history strongly suggests he may not know or care much about patient’s rights, but he has long been an expert on cheating the healthcare system.

In 1987, Scott founded Columbia Hospital Corporation and later acquired Hospital Corporation of America. In 1997, he was forced out of the company because of the largest Medicaid/Medicare fraud in US history. The company eventually reached a $1.7 billion settlement with the government.

In the upside-down thinking of the previous administration, Scott would have been a likely candidate to oversee healthcare reform. But since that didn’t happen, private citizen Scott decided to spend some of his ill-gotten gain to defeat reform by himself if necessary.

Despite his nefarious background, Scott financed and appeared in TV ads swift-boating healthcare reform. As The Nation magazine put it, “Having Scott lead the charge against healthcare reform is like tapping Bernie Madoff to campaign against tighter securities regulation.” 

Like Madoff, Scott ought to be an object of derision, and he ought to be laughed off the air. But there is nothing funny about this clown, or the fact that so far he has escaped spending his days in prison.

Unindicted corporate co-conspirators

Apparently, Scott covered his tracks well, since he was not criminally prosecuted in the gigantic fraud at HCA. But he was not the only one involved with that company to escape prosecution.

HCA was founded by the father and brother of Senator Bill Frist, former Senate Majority Leader, who infamously misdiagnosed Terry Schiavo from watching television. Senator Frist was not prosecuted for insider trading despite selling off all his HCA shares two weeks before the stock plunged.

Frist claimed he sold his shares in case he decided to run for President. But the fact that other HCA executives engaged in the same insider trading belied that contention. HCA was sued by its shareholders, and the company eventually agreed to a $20 million settlement.

Nobody does it better – or worse

Given its sordid history, HCA is a perfect example of the flawed conservative ideology that insists private industry always does it better. Check that – to date nobody has committed Medicare and Medicaid fraud better.

Our reliance on private industry has resulted in much more expensive and much less satisfactory healthcare. We are at least a half-a-century behind most of the industrialized Western world, and it’s high time we finally did the right thing. Our present system must be changed; the only questions left are how and how much it will cost.

Actually, there is one other question:  Will those with a vested interest in the status quo succeed in preventing meaningful change?

©2009 Tom Cordle

(Thanks to the brilliant Sandra Miller Stephens for coining "tonguage".)