There has been some criticism of US Health and Human Services Secretary Kathleen Sebelius’ remarks regarding the notion of a private insurance monopoly in the U.S.:

“We want to make this work. We understand the status quo is unacceptable. We understand we have to do something this year. And we also understand that an insurance monopoly with only private companies doesn’t hold down costs.”

See her on NewsHour:

Before I share links of examples of monopolistic behaviors amongst healthcare companies and the lawsuits that are a result of these monopolies, I want to add that the market has had decades to increase competition and differentiate on quality of care, services offered, cost and any number of features. That the private industry cannot and will not cover everybody is a market failure to provide a basic human right: access to healthcare for every citizen.

I found this 109 page PDF on the Healthcare for America Now website. Of note:

“If they chose to, private insurers could use their market power to drive hard bargains and lower costs, but instead they have passed along these costs through higher premiums to enrollees and employers.”

and:

This page shows U.S. Insurance Market Concentration by State using 2007 data. (Here’s a more legible PDF)

The most populous states have better insurance “options”, but one still has to qualify to be insured and the premiums in New York and California are about what most people in the U.S. pay on their mortgage.

Links about lawsuits & settlements
From 2006 NYTimes: Doctors’ Group Sues Two Insurers, Charging Unfair Coercion

From 2006 medicalnewstoday.com: Lawsuit Claims Several Health Care Systems Conspired To Fix Pay For Nurses

From 2007 NYTimes: Hospital Sues Insurer, Charging Conspiracy

From early 2009 Reuters: UnitedHealth settles payment suits for $350 million

From 2006 FierceHealthcare.com: HealthOne fights UnitedHealth suit (This is awesome! UnitedHealth claimed that HCA was using anti-competitive practices! HCA fought back.)

From today’s Wall Street Journal: Big Health Firms Underpay Claims

In all of these links, the behavior of the insurance companies are anti-competitive and indicative of what happens when monopolies exist.

The longer I research and write about healthcare reform, the harder I’m leaning toward scrapping the health insurance industry and advocating a single payer system. The stories and behaviors of private companies are horrifying. I can be a realist sometimes. We are not in a climate where single payer is going to happen. However, I believe we are in a climate where a public option is a must. No real change is going to happen unless there is an option for everybody to be covered. Private industry will not do it. It’s time for the government to step in. o

Since we’re talking healthcare I thought I’d share a few more links from around the web today. Jason over at kottke.org posted an update to a previous kottke.org post linking to articles on issues around healthcare costs in the U.S. healthcare system. The first linked article is from the New Yorker and profiles McAllen, Texas, the most expensive city for healthcare in the U.S. The primary point to the New Yorker article is the view that McAllen’s expensive healthcare is due to “overutilization”, the practice of over-testing, over-treating and defensive medicine. One of the critques of the New Yorker piece is that it didn’t address the poverty and unhealthy populace. The author of the original responds here. It’s all really good stuff and should help those who have commented on blurbomat™ the past few days in our conversation on healthcare reform.

The kottke.org updates also include a link to this 2008 video of Dr. Peter Orszag’s lecture to the Illinois College of Business. Dr. Orszag is the Director of the Office of Management and Budget for the White House.

NPR’s Talk of the Nation’s Science Friday talked about healthcare reform and cost control last Friday, mentioning McAllen among other things. Listen here.

It’s clear that the solutions ahead will involve every area of the existing healthcare environment. Cost cuts, salary, tort reform, tuition help (including a living expense grant/help), patient education and more. With all of the powerful lobbies involved, it’s going to take a vocal populace to move forward. o

Saw this over at TPM:

Why the Critics of a Public Option for Health Care Are Wrong | Robert Reich’s Blog

Reich makes several great points. o

I’m going to be throwing a lot of numbers around over the next few posts. I intend to source them with US government numbers or as independent, non-partisan sources as I have found.

First, why is healthcare so expensive in the U.S.? Most of my information will be coming from a 2007 McKinsey report on Healthcare costs in the US. To download the PDFs from McKinsey, registration is required. There are two PDFs; a synthesis report that is fairly brief and a longer, more detailed report. Both are worth viewing and downloading.

Main points of this reporting worth considering (these are taken from the shorter PDF linked on the McKinsey page as “Synthesis”):

• The United States spends more of its wealth on health care than any other developed country.
• The amount is 16% of GDP. This expenditure on health care is more than the U.S. spends on food. This bears repeating. The United States spends more on health care than it does on food.
• The U.S. spends $1,645 MORE per person than 13 other Organisation for Economic Co-operation and Development (OECD) countries. (more here, you’ll have to click into “Health” as the site is done using frames and linking to the specific page is difficult)
• The U.S. health care system is intrinsically more expensive in the following areas: hospital care, drugs, outpatient care, administration, insurance and public investment in health.
• The U.S. consumes LESS drugs than Canada, Germany and the UK.
• U.S. drug costs are 50-70% higher than peer countries.
• U.S. physician compensation is 6.6 times GDP per capita for specialists and 4.2 times GDP per capita for generalists compared to 4 times GDP per capita for specialists and 3.2 times GDP per capita for generalists in peer countries.
• U.S. physicians see, on average 1.6 times more patients than their counterparts in peer countries.
• In 2003, the U.S. spent $412 per capita on health care administrative costs—nearly six times that of other OECD countries.

The U.S. is expensive. These are just top-level points. The complete McKinsey report is well worth reading as all of these points are examined in a depth that I cannot do here. I did not touch physician owned facilities where expensive procedures (scans, outpatient care, et al) are performed. I also have not talked about expensive technology and how it is utilized and/or self-referred from physicians who also have a stake in said facility.

Many people are calling into question the number of uninsured in the United States. This chart:

from: U.S. Census information about uninsured as of 2007. It’s a PDF.

Whether or not you count illegal immigrants in those numbers or not, the number of uninsured in the United States is far too high and is a travesty. It is nothing short of a massive market failure to provide a service to the general populace. It’s a damning blow to privatization of for-profit healthcare.

Finally, the U.S. spends a great deal of money on health care, surely this would mean the U.S. has a better quality of health care service, care and delivery. However, the U.S. ranks lowest on overall life expectancy compared to England, Germany, France, Italy, Holland, Denmark, Sweden and Japan.

See also: WHO rankings and Study on Healthcare Quality.

Your thoughts? o