Healthcare Reform; Socialism or Fascism?
Healthcare Reform; Socialism or Fascism?
Whole Foods CEO John Mackey in 2009 originally called President Obama’s healthcare plan a form of Socialism while writing an op-ed for the Wall Street Journal:
“The problem with socialism is that eventually you run out of other people’s money.” Margaret Thatcher”
and added to Thatcher’s statement:
“While we clearly need health-care reform, the last thing our country needs is a massive new health-care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us much closer to a government takeover of our health-care system,” he wrote.
Mackey joins other CEO’s (Papa Johns, Olive Garden, Applebees, etc.) (Raising the Cost of Pizza 10 to 14 cents); who refuse to understand the need for healthcare reform, support a commercial healthcare insurance and industry solution even though both have done little to voluntarily rein in costs, are willing to penalize their employees for the PPACA, and ignore the results of doing nothing and associated increased costs. Since Hillarycare (1994), the industry has ignored increasing costs and has not provided solutions to mitigate them. As shown in Figure 1 annual healthcare cost has grown much faster than inflation. Figure 4 shows the increase in House hold expenditures since 1994 when Hillarycare was considered.
“American Healthcare since 1994” Center for American Progress
Recently during an NPR interview, John Mackey changed his opinion calling the PPACA fascism instead of Socialism:
“Technically speaking, it’s more like fascism. Socialism is where the government owns the means of production. In fascism, the government doesn’t own the means of production, but they do control it — and that’s what’s happening with our health care programs and these reforms.” Obamacare Is Fascist, Not Socialist
In a short period after labeling the PPACA as fascism, John Mackey reconsiders his words after a public uproar and retracted his name-calling of President Obama as a fascist and the PPACA as fascism. All of this from a Liberal now turned Libertarian.
“The term fascism today stirs up too much negative emotion with its horrific associations in the 20th century,” he said.
“I believe that, if the goal is universal health care, our country would be far better served by combining free enterprise capitalism with a strong governmental safety net for our poorest citizens and those with preexisting conditions, helping everyone to be able to buy insurance. This is what Switzerland does and I think we would be much better off copying that system than where we are currently headed in the United States.” Whole Foods CEO Regrets . . .”
It has only been since the passage of the PPACA (see S&P Healthcare Indices) has the healthcare industry begun to rein in costs as reflected in Medicare, Medicaid, and SCHPS through efficiencies. Much of this is due to the healthcare industry rapidly preparing for the 2014 final implementation of the PPACA. More will come after 2014.
You would think this would be enough? At the same time, the Republicans are calling for cuts to the three programs to lower deficit spending; the President is offering to consider modest cuts and shows willingness to sell-out the citizens to achieve his Grand Deal. Cuts in any of the programs will do nothing to lower healthcare industry cost as these programs are a reflection of the industry. In the end, such a Grand Deal will lay the burden of healthcare costs on the elderly, the poor and the children of this nation. The “I Made This” John Mackeys of the world who became rich as a result his customers buying from Whole Foods will absolve themselves of any social responsibility.
Oh sure, he wants a Swiss system. The one where the privates are not allowed to make a profit from the primary compulsatory plan and they are priced the same regardless of age and the government makes up the difference of the premium that is above 8% of one’s income?
At the same time Obama/dems deal away the nonprofit componate of the ACA, the one that was to help develope nonprofits with only a 5% admin cost allowed to compete in the exchanges in the most recent tax deal.
They are all idiots!
Couple of quick comments:
I have already predicted Obamacare will fail because the model is too complicated to operate.
Any reductions in health care cost are more likely to result from a faltering economy (flat wages, deferred elective services) than Obamacare. Obamacare is barely at the beginning of implementation.
The problem with federal programs is the assumption all businesses are about the same, but retail in a sick economy is really gonna get hammered and the trickle down will fall on the employees.
And the use of either socialism or fascism is ridiculous.
Noting quietly that all three of the listed CEOs are in the restaurant industry.
I wonder if it’s not about the employee costs, it’s about the other business ramifications of people taking notice of how much healthcare costs, and possibly mandating lifestyle choice information or product characteristics that would be contrary to their desire to sell their products.
Could those who continuously suggest that health care costs be reduced please be a bit more specific. What is are the specifics of the excessive costs of health care? Are individual providers receiving too much for their services? Are the health care institutions wasting money, and how are they doing so? Is it the third party payers that are adding too much in the way of administrative costs and profit margins? Or, is it a case of too much unnecessary treatments being provided and paid for? What is the actual shape of excessive health care costs?
And health care costs are too high compared to what? Let’s not compare between different countries. Let’s compare between various services within our own country. For example, there are ancillary health providers, such as physical therapists, who are reimbursed approximately $35-$45 per client session. Such sessions are usually 45 mins to an hour. My barber, no I don’t use a hair stylist, charges $15 for a fifteen minute cut and gets a tip of between $2 and $5 depending on the customer. That’s about $60 to $70 per hour for cutting hair. So I ask the question, who is receiving all the too high amounts that health care is costing in this country? Granted that I think a physician with a highly skilled specialty who earns about $1M annually has little to complain about, but Jamie Dimon just took a “hair cut” down to only(?) $11.5M for 2012. And that on the heels of about $23M for 2011. So what is too costly about health care in this country? Where is the fat being rendered?
Re: “The problem with socialism is that eventually you run out of other people’s money.” Margaret Thatcher”
Interestingly, that’s also the problem with capitalism, and, if history is any guide, it is a more serious problem in capitalist countries than in socialist ones. You can invest all you want, but unless someone is building consumers to buy your product, you are eventually going to go out of business. You can’t make money buying your own goods and services, you need other people, and those people have got to be able to get money somehow.
He’s almost got it, it’s a matter of rearrainging the words: with Socialism yes, the state – the Government – control the means of production (and distribution) – the Corporation; whereas with Fascism the means of production (and distribution) – the Corporation – control the state – the Government.
I agree, use of either is just plaim stupid.
Back in 2009 I addressed an area related to your question of where’s the cost.
In it I present a study looking at admin costs. There are some charts from the study that show the difference in employee/enrollee ratios for US insureres vs Canadian.
I also present another study that looked at practice models in a same coverage insurance program with similar patient populations.
There is data out there. We know were the costs are. However, a private insurance system does not build it’s wealth by cutting it’s payouts via decreasing claims costs. And, it appears our system has developed an entirely new area for growth: administration of claims. It adds revenue to the insurer, but has done little for reducing costs.
No one can overlook the fact (see link below) that most of the unnecessary costs in America’s healthcare system aren’t being generated at the bedside level, but instead they are being generated behind the scenes at the administrative level, which is taking on more and more characteristics of a bloated, broken bureaucracy.
One of main reasons why the burden of bureaucracy is bearing down hard on our healthcare system is because health insurers, private as well as public, have recently made the decision not to reimburse hospitals if they score too low on so-called “quality standards,” or if either their doctors or nurses fail to document the most minor or, in my view, the most irrelevant details about their patients. Insurers couldn’t care less if doctors and nurses properly diagnose and treat patients, thus improving their outcome and reducing their hospital stay, they ONLY care about finding excuses not to reimburse doctors and nurses for the care they give to their patients.
So as healthcare insurers hire more chart auditors (i.e. “care utilization managers”), who are very costly BTW, (their salary is roughly 20 to 30% higher than it is for a highly experienced critical/acute-care nurse, and unfortunately, their jobs can’t be shipped to low-wage countries like India or the Philippines), to comb through charts looking for shortfalls in quality standards, as well as charting errors and omissions, healthcare providers must respond by hiring more chart auditors (i.e. “care utilization managers”), who are just as costly as the ones being hired by insurers, to detect shortfalls in quality standards, as well as charting error and omissions, and see to it that these things are fixed or corrected. Otherwise, healthcare providers are at substantial risk of not being reimbursed by insurers. This escalating battle — I like to refer to it as an “arms race” — between providers and insurers must be put to a stop before administrative costs (i.e. wasteful red tape) outstrip the cost of providing actual care for patients!
Good Morning Jack:
Myself, Maggie Mahar, Ezra Klein, etc. have been writing on the topic for a long time now or since the PPACA was evolving. While I agree with Cynthia the administration is a cost worth attacking in the private sector and also within Medicare, I strongly believe the cost of materials (procedures, pharma, supplies, etc) offer a much larger target than administration.
1. One simple solution would be the bundling of charges coming from a hospital stay part of PPACA). Speaking of my visit to the hospital in September, I received multiple sets of bills from:
– The ER Doctors
– Endoscopy Surgeon
– Gall Blader Surgeon
These services were in network with the hospital; but, they were out of network with my insurance company. The insurance company sent me the checks which I deposited in my HSA and then paid each of the separately. Think of the costs behind this in paperwork and administration. The same is occurring with my recent open heart surgery (it has not been a fun 3 months!). If the hospital managed this, both insurance and they would have one bill to pay with each of the others being paid from the hospital.
2. Specialists are more highly paid then primary care; yet, we have a potential lack of primary care to handle the day to day and preventitive care. The market is not adjusting to it either. Within the PPACA, the priority will be placed more so on Primary Care than on specialties. More money will be allocated to them.
3. There is waste in Medicare which will be cleaned up over the next few years. One area is in the purchase of pharma, hospital supplies (catheters, blood bags, solutions, etc.); Obama has pledges to turn Medicare loose to negotiate costs with these suppliers the same as Medicaid. Materials (supplies, pharma, etc.) is a much bigger nut to crack than Labor). Maggie Mahar has pointed out the money to be saved could potential pay for the retirement of babyboomers.
4. The cost model is being changed from fees for services which encourages a doctor to sell more procedures to better outcomes for fees which does not encourage the use of procedures and services which may have a limited impact.
Some reading perhaps would help:
http://www.angrybearblog.com/2011/08/medicare-sky-is-falling.html All 4 of my posts are included there.
Maggie Mahar does a nice job here: http://www.healthbeatblog.com/2011/05/medicare-breaks-the-inflation-curve-/
While I agree there is potential in cleaning up hospital administrative and insurance requirements, I would also look to Pharma (the patent laws are a joke here), Hospital Supplies (Baxter Abbot, etc., and Specialties vs Primary Care. There is more to be had with better negotiations by Medicare/Medicaid within these three areas. I am not slighting admionistration as it has grown; but, electronical record keeping, bundling, etc. should go a long way to wards resolving much of this.
Good information though.
The most astounding thing about MacKay’s comments, besides pissing off large numbers of his customer base, is that the guy reaches out for Switzerland as an counter-example to “Obamacare,” when in fact the AAHCA most closely resembles the Swiss and German systems, including the provision for mandatory coverage. http://en.wikipedia.org/wiki/Healthcare_in_Switzerland
The stupidity, it burns.
Nonsense to much of what you post.
“I have already predicted Obamacare will fail because the model is too complicated to operate.’
Me: When was the last time you looked at your own healthcare plan and its complexity? Most of us see a couple of sheets of paper with bullet points and never look at the minute detail. Commercial Insurance has the same complexity as will the PPACA; but, the PPACA will not pass it off to patients as readily as Commercial Insurance.
“Any reductions in health care cost are more likely to result from a faltering economy (flat wages, deferred elective services) than Obamacare. Obamacare is barely at the beginning of implementation.”
Me: There are already reductions being seen in overall healthcare cost which are the result of healthcare preparing for the PPACA. S$P Healthcare Indices reflect what you are saying in 2009; but the costs shot up later in 2010. The overall trend is a downward slope with Medicare leading the way at 2.32%. http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldocumentfile&blobtable=SPComSecureDocument&blobheadervalue2=inline%3B+filename%3Ddownload.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blobkey=id&blobheadername1=content-type&blobwhere=1245346341634&blobheadervalue3=abinary%3B+charset%3DUTF-8&blobnocache=true
“The problem with federal programs is the assumption all businesses are about the same, but retail in a sick economy is really gonna get hammered and the trickle down will fall on the employees.”
Me: There is a cost model to this: Cost of Direct Labor, Materials/services; Overhead. Labor is the smallest portion of total costs of Operations. The costs of restaurants is not in the Labor as much as it is in the cost of Overhead and Materials. To supply pizza and afford healthcare insurance was 10 to 14 cent more per pizza. The cost of Pappa John’s CEO flapping his lips, cost him more than the increase in pizza. The public was pissed t them (catch Reddit’s post on it). What you and many others seem to forget is; ER visits are more expensive than clinical visits and the lack of treatment costs more in the end than treatment when needed. This is the hidden cost of noninsurance is seldom talked about.
If the PPACA fails then maybe we will see Universal or One payer healthcare in which case Insurance companies will see their demise similar as automotive.
“And the use of either socialism or fascism is ridiculous.”
I agreee, John Mackey may not like it; but, detailing it in such a manner is ridiculous and it reflects on him.
“Obamacare will fail because it’s too complicated.” No, if Obamacare fails it will be the result of relying too heavily on the current private insurance model. The cost to consumers for Medicare is too low relative to the cost to pay for the services received by the elderly. This is not to say that I am against the program. Quite the contrary.The program would be more cost effective if less elderly, healthy individuals were eligible for the program. In the meantime, raise the premiums on the future beneficiaries to keep the program intact. Don’t you wonder why the Pete Peterson’s and Paul Ryan’s of the world never suggest this option? The answer is fairly straightforward: These people have no interest in preserving the program.
i am not sure i quite understand what you are saying.
but just as something to think about, starting health care reform by returning Medicare to full pay for all reasonable health costs to the elderly, paid for by a dedicated, transparent tax, apportioned as nearly as possible so that everyone pays their own “expected” costs in old age over a lifetime of manageable payroll deductions. There would need to be some help for the very poor, paid for by a somewhat larger premium for the better off… but not so large that it represents more than a reasonable additional premium that insures the better off against the possibility that they might one day be one of those poor who can’t afford the basic premium for strictly medical costs.
at least calculating how this would work out in some detail would give us some idea of what we are paying for when we choose to do it some other way.
my guess is that once the people see what medical care will cost them, they will become much more attentive to controlling those costs… not by being “better shoppers” but by supporting a government that has the resources to monitor and control those costs.
but you can’t do this by encouraging fairy tale thinking like “the government should pay for it” or worse “tax the rich to pay for it.” the rich will pay a reasonable share. they will not pay an unreasonable share for long before they find a way to kill “social insurance” entirely.
i should add that “pay as you go” insures against “medical cost inflation” and means the higher future costs will be paid by those who, we hope, will be earning higher future wages.
it is insane to expect people to pay for insurance while they are working, and then to do without when they are old and no longer working because the costs for old people are higher than for young people.
and it is insane to expect people to “save” for future costs that will be going up faster than the interest on their savings.
Social Security solved these problems, but most people, with a little help from the Big Liars, don’t understand this.
Thanks one and all. All said is most enlightening. My initial question was intended to be both interogative and rhetorical at the same time and the replies did much to satisfy both intentions.
A big problem for the future is reimbursement for some types of care and variation in reimbursement for the same care given in slightly differing settings. The hair cutter analogy is real and we may lose access to quality ancillary services if the reimbursement rates are not looked at more closely. That a barber can earn as much as a physical therapist is a bit much. A hair stylist is way ahead of both. Where are our priorities?
A recent experience with a colonoscopy was enlightening, as well as a pain in the butt. After the exam the physician, Bd. certified GI doctor, discusses with the patient the fact that he will be moving to a newly forming hospital based clinic. This after being in private practice for the past thirty years. Why, I ask. The insurance or Medicare reimbursement is about $200 for a service that has costs that are higher. So he says. The hospital running the clinic will be reimbursed about $700 for the same exam. Why, I ask again. If the private practitioner objects to the reimbursement the insurer says take it or leave it. The hospital need not object. It need only to point out that the 17,000 physicians associated with the hospital’s many branches are in play. Market clout? Medical care should be fairly reimbursed and not subject to market forces which are needed to obtain a fair price for what are critical aspects of health care.
Anecdotal to be sure, but informative none the less.
This is a terrific article and a terrific Comments thread. So informative. (Wow, Cynthia, who knew? I sure didn’t.)
And, folks, don’t miss this takedown of Mackey, called “Dear Whole Foods CEO, This Is What a Fascist Looks Like,” by Thom Hartmann and Sam Sacks, via ReaderSupportedNews, at http://readersupportednews.org/opinion2/277-75/15632-focus-dear-whole-foods-ceo-this-is-what-a-fascist-looks-like.
I have my own suggestion to Mackey, though: Consider expanding your company to other countries. Australia, maybe. Germany. Canada. Sweden. France. Britain. Norway. Holland. Maybe even Israel and Poland, both of them countries whose healthcare system Mitt Romney praised last summer. Or maybe Switzerland, where, as another reader commented above, you can see a fascist (or is it socialist?) system at work while admiring the beautiful mountainscape, and maybe even skiing through it.
And while you’re there, break a leg.
My initial sentence was in quotation marks, referring to a previous comment up thread. Not my thoughts at all. I would agree with what you’ve stated. I was trying to say that I think expanding the coverage under Medicare to a broader range of participants, (healthier, younger) would probably make the cost more effective and likely cheaper in the long run.
i am all in favor of expanding Medicare down. but first things first. let us understand what we are paying for and how much.
and don’t expect the cost to go down when you expand who can get treatment.
currently you are paying, arguably, for the treatment you will need when you are over sixty five. even though you are not that old yet.
when you expand who can get treated, you will increase the costs, not decrease them. but probably not by very much. at some point people will realize that one way or another they need to pay for their medical costs. Medicare is the most rational way to do it.
Designed into the PPACA is called changing the cost model from fees for services to fees for better outcome.
Coberly what you are forgetting also is the MLR for commercial insurance 100% is established for the young and healthier patients, 150% for smokers (tell me why this?), and 300% for the elderly maximum. I will not see a rebate next year due to my excess medical care 2012.
Medicade/Medicaid are due to negotiate harder with Pharma, hospital supply providers, and others as well. The emphasis is on primary care over specialists also.
Medical is going electronic. Hospitals will be bundling costs into one bill and pay doctors and radiology and ER personnel. Ther are more cost reductions coming which you can find by googling Kaiser or looking up Obamacare/PPACA.
The emphasis is already on cutting waste in Medicare and Medicaid. Estimated healthcare costs have already dropped $100 billion over the next 10 years. It is just starting.
alas i don’t understand your point.
But this I do understand: charging the elderly tree times as much as the young and health is stupid.
We are all going to be elderly, and on limited income. It’s smarter to pay more now in order to pay in advance for our greater needs when we are elderly and have less money.
I think only the government can manage such an arrangement. It is called Social Security and is really true of Medicare as well… except that with Medicare it is not “dedicated and transparent” and relies on taxing the rich far out of proportion to what would be reasonable insurance for them, thus guaranteeing entrenched political opposition by those with the most political power.
I’m all in favor of insuring the elderly under Medicare. Hopefully, the cost savings alluded to by Bill will relieve some of the pressure on cost. I’m not in favor of “overtaxing” anyone to pay for the program. By the same token, up until now it would seem that the premiums paid in over a working lifetime have not been enough to cover the cost for current participants. Perhaps some way of increasing contributions without it appearing to gouge the wealthy can be found. I realize that expanding the pool of participants will most likely add to the cost of providing service. I was thinking that with a healthier, younger group of participants the coverage/payouts in services would most likely be lower, compared to average cost for those currently in the program. Perhaps you’re right, and cost would rise slightly. In which case, premiums would have to be either raised or subsidized by taxpayers.
the premiums paid in over a working lifetime would, of course, have to rise to keep up with current rises in the cost of medical care… some of which is actually useful in helping you live longer and healthier lives.
what we have now is a Medicare tax held artificially low by a misguided effort to make the rich pay for it through general taxes. which makes the rich work extra hard to cut Medicare benefits below the level where they pay for the needs of the elderly.
i think this must be hard to understand because no one understands it.
but if “we” are going to have medical care, “we” are going to have to pay for it. expecting someone else to pay for it will make it always under pressure from those who want to cut it without regard to the effect cuts have on the people who need it.
and to the extent the rich do pay for it, they pass the costs on to us anyway. so what do we gain?
i am reasonably sure that if “we” pay for it we will find ways to control costs without cutting benefits, and that we can find a way to help the poor without scaring the rich stupid.
i’m not sure, but i think approximately doubling the current Medicare tax over the reasonably near future (ten years?) would pay for all costs over that same time. it would be necessary to cap the tax so the very rich are NOT paying an inordinate amount (from their perspective).
at first people would go crazy at the idea of paying another 2% tax for their Medicare, but with reasonably good leadership… and a gradual introduction of the tax… they could be persuaded to understand that they are merely paying “while they can afford it” for the care they will need when they can’t afford it.
That might mean buying one less new car over the the same time period. So I guess you’d just have to decide what is more important to you… a new car now, or health care when you are old.
Sadly, I already know how most people will answer this.
Thanks for the feedback. I’m not so sure how people would respond to an increase of, say, 2%. If the choices are: cut benefits, institute a voucher program or raise the rates to sustain the program long term, I think you’d be surprised how many people would pay the added cost. I would. It is all about framing the narrative. Those that are proposing cutting the program, or worse yet, voucherizing the program have no interest at all in fixing the program. They simply wish to get rid of it. Keep hammering this point at every opportunity, and I think the majority of citizens would buy in to higher rates.
but i need a bigger hammer.
We have gone through this several times now. I explain it and you what to dispute it. It is what it is and it is far better than nothing.
As it is, it was a struggle to get what it is today with the likes of the Blue Dogs and Lieberman who finally retired. If you can find a Congress willing to pass what you are describing, it will definitely be better. Coberly, this Congress does not exist today and probably will not due to the state gerrmandering of congressional districts for Congressmen.
The 3 times is based on the lowest cost for the healthiest insuree which is far better than the 6 times an insuree is being charged today based upon what the market will bear (if they really want to insure you). Those with little income will either go on Medicaid or will recieve the same subsidies to keep the insurance cost at less than 9% of income (if not on Medicare).
Because of the passage of the PPACA, Medicare has been able to extend it TF 5-6 years without charging more. If you remember this was the $700 billion Romney claimed was stolen from the elderly. This savings comes from cuts from multiple areas including the Advantage Programs. Both Obama and Romney pledged to keep Medicare from rising more than 1% annually. Fo Obama, much of this cost control will be realized from the PPACA.
Depletion is now ~2024 and as you know it changes the same as the SS TF due to a number of reasons. Increases in commericial healthcare (Pharma and hospital supplies) are the biggest reason for depletion. http://www.americanprogress.org/issues/healthcare/news/2012/07/06/11894/obamacare-is-good-for-medicare/
If we were all placed on Medicare, it would be better assuming the outcomes were better than commercial. Medicare today could be tweaked over the years so it was not a drastic increase.
Coberly, why not take some time and read up on the PPACA.
Bill H (ska run75411)
thanks for linking to my post.
On charging older Americans 3 times as much — the bill wouldn’t have passed without that provision.
It’s that simple. Younger Americans
are, by and large, very reluctant to help support an older generation, and for politicians (esp. Democrats) this is a very important group of voters.
But as you say, the good news is
that charging older Americans three times as much is not nearly as bad as charging them 6 times as much (which now happens in some states.)
Moreover, under the ACA, people 50-64 can be charged 3 times as much only if state law permits it. In New York State “age rating” is not allowed at all and in a number of states it is limited to charging them twice as much.
The most important news is this: under the ACA both middle-income and low-income 50-64 year old olds buying their own insurance will be eligible for a subsidy. In addition, insurers
will not be able to charge them
co-pays for preventive care,, and the deductible will not apply.
Finally they cannot be charged more because they suffer from a pre-existing condition.
This is all very good news for seniors ,
The debate about healthcare reform has heated up, cooled down and is still being debated. The question I think people should be asking is how the healthcare reform will affect them personally.