Profits and equity in health reform

By Michelle Chen May 13, 2009

The healthcare industry brought us some good news this week: after years of astronomical spending growth and tens of millions left with no coverage, lobbyists have purportedly gotten religion on health care reform. Advocates for private insurers and other industry interests say the industry wants to voluntarily rein in costs to bring "affordable" health care to all Americans. The measures include improving bureaucratic efficiency and promoting preventive care. With Congress weighing various remedies for the country’s healthcare crisis, it should come as no surprise that the insurance industry is trying to co-opt the game. But why not embrace the industry’s new penchant for self-regulation? David Sirota expounds on the fortuitous timing of the industry’s anti-regulatory cost-control proposal:

"If the health industry is saying it can lower costs by $2 trillion over 10 years and remain highly profitable, isn’t the industry admitting that it was planning to absolutely bilk consumers, and has been bilking consumers in the past? Put another way, isn’t the industry admitting that it’s entire business model is based on outright profiteering?"

And what about those raucous single-payer advocates who keep muttering stuff about socialistic alternatives to the byzantine and dysfunctional commercial healthcare system? The industry probably doesn’t have to worry about opposition from its more radical critics, since they’ve essentially been shut out of the inner-sanctum health policy debate in Washington. Still, if Congress does eventually hammer out a universal coverage plan, those looking for a cost-cutting model may want to refer to the recent testimony of Dr. David U. Himmelstein of Physicians for a National Health Plan, which argues that universal coverage could lead to disaster without establishing a comprehensive public system akin to Canada’s. Another reason to be skeptical about entrusting too much of healthcare expansion to private insurers is that achieving universal coverage is not just question of affordability, but of resolving systemic racial and socioeconomic disparities. The advocacy organization Families USA reports that "More than half of Hispanics/Latinos (55.1 percent), two out of five African Americans (40.3 percent), and one-third of other racial and ethnic minorities (34 percent) were uninsured, compared to one-quarter of whites (25.8 percent)." And, "more than three-quarters of people of color (76.5 percent) were uninsured for six months or more." In addition, the racial disparities in coverage persisted even at higher income levels, suggesting that there are other forces at work than just unaffordability. And aside from inequality in insurance coverage, there are arguably more troubling racial disparities in health conditions and quality of care. However the healthcare reform discussion pans out, the question remains: can the public trust the private market with the mission of crafting a system that is not only affordable, but just?