Friday, March 23, 2012

Why Does Health Care Cost So Much?

Like many Americans, I’m satisfied with my health insurance.  As a retired government employee, my wife is covered with CIGNA and our premiums are mostly paid by the taxpayers.  But news that CIGNA’s top executive David Cordani enjoyed a pay increase of 25% last year, to $18.9 million annually, reminded me why health care reform remains an unresolved challenge for our country.

Cordani’s salary translates to nearly $10,000 an hour, compared to the $10.50 to $17.00 an hour that nursing assistants earn in Massachusetts.  Certified nurse assistants take vital signs, respond to hospital help lights, get patients in and out of bed and provide the hands-on care that make them the first responders of the medical world.  I’m not sure what David Cordani does to earn his exorbitant paycheck, except continue to ratchet up the price of insurance.  According to his corporate bio, he has a degree in business from the University of Hartford and lots of experience in marketing.

Bloated CEO pay packages and excessive administrative costs that consume 31% of every health care dollar spent in the U.S. are much of the reason we are poised to pour nearly $3 trillion on health care this year, a pile of dollars that if stacked one on top of the other would reach almost to the moon.  

Unfortunately, measures that are touted as “reform” (including the President’s Affordable Care Act due to be heard before the Supreme Court) do little to address these escalating costs.  The Greater Boston Interfaith Organization, which was a major advocate of our state’s 2006 mandated insurance law, is now calling for another mandate, a “cap” on the Bay State’s health care spending.  But so long as the profit-motive continues to drive the insurance industry, guys like David Cordani will surely continue to apply the first rule they learned in marketing school: Charge what the market will bear!

Cordani was the CIGNA spokesman five years ago who explained why his company wouldn’t pay for a 17-year-old girl with leukemia whom doctors had slated for a liver transplant.  The girl, named Natalie, was covered under her mom’s CIGNA policy and physicians gave her a 65% chance of recovery.  But business is business, right?  Cordani called the procedure experimental and wouldn’t cover it. Thanks to a lobbying campaign and thousands of phone calls generated by the state Nurses’ Association, the company eventually reversed its decision, but by that time Natalie was dead.  Those are the kind of tough decisions that earn you $19.8 million a year.
 
Isn’t it time to get private insurance companies and  profiteering out of medicine altogether?  Our neighbor to the north, the little state of Vermont, is poised to do just that, with a universal, single-payer plan due to take effect in 2014.  Instead of a dozen competing insurers, each skimming the system, there will be a single agency paying the bills—just as it’s done in Canada, in France, and in most of the rest of the civilized world where health spending is considerably lower than in the United States and where outcomes are better, whether measured by lifespan, infant mortality, survival rates for significant illness or almost any other index.  Organizations like Masscare calculate that our state could save $9.7 billion annually with a similar “Medicare for all” plan that eliminates the middle-man.
 
Of course, David Cordani would then be out of a job.  Do you think he knows how to empty bedpans?   

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