Thursday, March 05, 2009

The debate on healthcare reform

Surprisingly, a number of players in the healthcare industry are supportive of the outline that Obama has proposed for healthcare reform:

Just four months ago, the pharmaceutical industry was prepared for the worst. Drugmakers feared that Barack Obama would press for price controls on prescription drugs and readied plans for a multimillion-dollar ad campaign against the idea.

Instead, Obama chose a more modest approach after becoming president, proposing to extract bigger discounts on medications bought through Medicaid. The plan could save the drug companies billions a year compared with price controls....

Obama's opening gambit to dramatically expand the health-care system has attracted surprising notes of support from insurers, hospitals and other players in the powerful medical lobby who are set to participate in an unusual White House summit on the issue this afternoon. The lure for the industry is the prospect of tens of millions of new customers: If Obama succeeds in fulfilling his pledge to cover many more Americans, those newly insured people will get checkups, purchase medicine, undergo physical therapy and get surgeries they cannot afford today....

The unstated intention of Obama's approach is to dole out the pain in small, easier-to-swallow bites to minimize opposition, White House aides say. Under the president's plan, hospitals, doctors, drugmakers, insurance companies and wealthy seniors -- all of whom will be represented at today's summit -- would sacrifice. But if the system was calibrated properly, no one would lose too much.

But there is still opposition. Ezra Klein helps to fill in the background on Rick Scott, the spokesperson for an organization which is advocating against Obama's plan. Scott was formerly the CEO of Columbia/HCA Healthcare:

In the 90s, HCA was the largest for-profit hospital company in America. As Forbes wrote, "it bought hospitals by the bucketful and promised to squeeze blood from each one." More than any other single company, it was responsible for the cruelty that turned the public against managed care. Indeed, remember when audiences began spontaneously clapping for Helen Hunt's anti-HMO rant in As Good As It Gets? That was the sort of ruthless cost-cutting pioneered by HCA they were shouting down. If Scott didn't exist, health reformers would have to invent him.

But it turned out that HCA's wild profitability wasn't all efficiencies. A seven-year federal investigation uncovered widespread fraud. According to Forbes, HCA has "increased Medicare billings by exaggerating the seriousness of the illnesses they were treating. It also granted doctors partnerships in company hospitals as a kickback for the doctors referring patients to HCA. In addition, it gave doctors 'loans' that were never expected to be paid back, free rent, free office furniture, and free drugs from hospital pharmacies."

When all was said and done, HCA agreed to pay the government $1.7 billion. It was the largest fraud settlement in U.S. history. Richard Scott, the CEO, was forced to resign in shame.

Richard Scott, opponent to healthcare reform; click for more info

And Ezra summarizes thusly:
So, to recap: The first major health care group fielded in opposition to Obama's initiative comes from a for-profit hospital executive who resigned amidst the largest fraud case in United States history and means to sell an anti-government message using the same PR firm that helped the Swift Boat veterans.
More here.

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