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Private Health Insurers Ripping Off Public

By News From Massachusetts School of Law  Posted by Sherwood Ross (about the submitter)       (Page 1 of 2 pages)     Permalink    (# of views)   No comments

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A Massachusetts School of Law Interview

Dean Lawrence Velvel, Host 

A prominent medical authority charged the U.S. health care delivery system is “outrageously expensive, far more expensive than any system in the world” and Americans aren’t getting their money’s worth.

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“We spend at least twice as much per capita on health care than most countries and vital health statistics show, on average, Americans don’t live as long as do the citizens of many other countries,” said Dr. Arnold Relman, past Emeritus Editor-in-Chief of The New England Journal of Medicine and a former Chief of Medicine at The Hospital of the University of Pennsylvania, Philadelphia.

“Vital health statistics show we’re in the middle of the pack or below” most advanced countries, Dr. Relman said. “Our infant mortality rate is greater despite the fact statistics show we are spending so much money.”

About 50 million people in the U.S. are without any medical insurance at all, he said, and “at least an equal number do not have enough health insurance all the time and have financial disaster if they become seriously ill.”

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Dr. Relman said that Canada delivers equal technology to patients and provides the same drugs as the U.S., yet the U.S. “medical-industrial complex” spends “almost twice as much as Canada spends.” (Canada is ranked 11th internationally in life expectancy at 80.7 years while the U.S. is ranked 38th, at 78.2 years. Japan is ranked first at 82.6 years.) 

Only in the U.S., Dr. Relman said, is health care and insurance in health care treated as a business: “We are alone in the extent to which health care has become an investor-owned enterprise.”

In an hour-long interview for “Books of Our Time,” broadcast nationally via Comcast, Relman told host Dean Lawrence Velvel of sponsoring Massachusetts School of Law:

“Health care providers in the U.S. are inefficient. For-profit insurance plans take out of the premiums we pay them on average 20 percent and some as much as 30 percent of the premium for their own profit… and for their own business and for their own overhead before they pay any money to health care providers, the doctors and the hospitals.”

“And as far as anyone can see, there is nothing of comparable value that we get (for what) they take away. We’re paying hundreds of billions of dollars in overhead costs to a class of private insurers,” said Dr. Relman, author of “A Second Opinion: Rescuing America’s Health Care”(Perseus Books Group).

 He added, “We have to find some fair and practical way to ease private insurance companies out of the health care business.”

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(According to the Congressional Research Report to Congress of last September 17th, a comparison of 30 members of the Organization of Economic Co-operation and Development showed in 2004 the U.S. spent $6,102 per capita on health care, more than double the OECD average and nearly 20% more than No. 2-ranked  Luxembourg. The report said in 2004, 15.3% of the U.S. economy was devoted to health care compared with 8.9% for the average OECD nation.)

Dr. Relman pointed out that Medicare operates with “an overhead cost of 3% of the money spent as compared to 15% to 25% overhead for private insurance. Total premiums are edging close to $1 trillion dollars, roughly $800 billion,” he said, “and take 20% of that and you’ve got $160 billion and that’s not counting the overhead they impose on the providers.”

He called for consolidating all the money being paid into medical insurance into a single-payer system run by one government agency. “There should be no bills,” Dr. Relman said.

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Sherwood Ross worked as a reporter for the Chicago Daily News and contributed a regular "Workplace" column for Reuters. He has contributed to national magazines and hosted a talk show on WOL, Washington, D.C. In the Sixties he was active as public (more...)

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