How To Nationalize Health Care - And Like It.

This is a revisit in detail of my previous post 10 "Simple" Steps to Health Care Reform. In that post, a commentary on a Huffington Post article about various means of fixing Health Care, I pointed out the only thing that will actually reduce health care costs:

Remove the profit motive.

In businesses, which virtually everything in health care is, the motive is to make a profit. I have no problem with this, provided it's done responsibly. But when it comes to human lives, the profit motive is diametrically opposed to the preservation of life. This motive influences everything from research and development to the rendering of services. In the end, medically-related industries financially thrive at the expense of patients who die due to a lack of affordable health care.

Now, this must be stressed: AFFORDABLE HEALTH CARE. That doesn't mean it's free. That doesn't mean the government pays for everything. Patients will pay for their health care, but at a greatly reduced rate. How reduced? That depends on the ways and means of implementation of this idea of mine.

First of all, the object is to nationalize health care in such a way that the government BUYS OUT all health care and health care related industries. This includes health insurance, health product and equipment manufacturers, drug manufacturers - everything health care related. The whole ball of wax. If you leave ONE of these industries free to make an uncontrolled profit, you don't get the same bang for the buck.

How is this done? First of all, establish a constitutional amendment that states health care is a basic human right. This then allows the rest to follow.

Next, provide financial incentives for education for health-care-related fields. If there's a shortage, give discounts to students looking to enter the field where that shortage exists.

Step three is to legislate caps on profits and total pay. Fix profits at no more than 5% + Inflation and be certain that all costs - including expansions, next year's research, etc. - are included in the operating budgets. Fix pay based on the equivalent civil service pay scales used in government hospitals. Have critical fields (Such as General Practitioners and nurses) paid better than normal to attract more people to that field. Lower the pay for those in glutted fields.

Step Four: Tort reform. Cap putative damages at a reasonable level and provide free care for life. No gigantic pay-outs. This eliminates the need for private sector workers to charge outrageous fees (according to them, to off-set malpractice insurance).

There will be loopholes. There will be those who try to avoid the restrictions. This is human nature and expected. Which leads to the next step: Buy-outs.

Start by closing trading on all public health care-related companies. Freeze stocks at their current levels. Next, use government funds to buy them out one at a time, then nationalize it. Investors lose nothing (assuming they bought when the price was low) and can then reinvest in other industries. Either way, they get SOMETHING back on their investment.

Retain the employees and properties, and put them to work producing their products to be sold at cost plus 10%. Yes, the Government will earn a 10% profit on what they buy - which will be used to help offset the cost of buying the stocks and nationalizing it in the first place. Granted, it's not fast, but this is a long-term solution. Once the cost of the investment to nationalize that business has been recovered, the 10% extra is dropped from the prices and all things from that company from that point on are sold at cost. This also provides incentive for people to shop around a bit and if the other businesses are smart, they'll cut their prices by 5% to undercut the government prices. Eventually, though, the government will be cheaper. In the case of the 5% profit for privatized companies, they can use it for pay bonuses above and beyond current salaries, to provide incentive. It's not a lot, but it's something.

Wash, rinse, repeat.

Everyone keeps their current job (unless they don't like the pay, then they quit of their own accord) and the process continues under new management whose motive isn't profit, but providing affordable health care. With everything being charged at cost plus 10% (at most), huge payouts for damages aren't being laid on insurers and with wages capped, health care becomes a hell of a lot more affordable. Insurers can insure to pay reasonable costs instead of inflated ones. People can shop for insurance companies and save a little more from those that don't try to get a profit but are satisfied with their income and expense balances.

Economists may blanch at the thought of nationalization of such a large sector of the American economy, but here's the low-down in the whys.

First of all, we have no cures. Except for Smallpox, we are still plagued by every other thing that has plagued mankind from day one. Why no cures? It's not that they don't exist. It's that they're not PROFITABLE.

If you get Cancer, you get treatments. The Cancer may go into remission, since you were only treated, but you will live in fear for the rest of your life that it may come back. Then you get more treatments. Treatments are repeated, expensive and not always effective. But they are also immensely profitable for the drug manufacturers.

What if it was a cure? A cure can be even more expensive, but there's no chance of it coming back, no chance of repetition of that income, and making it cost as much as all of the repeated treatments is beyond the means of most everyone - insurers included. Cures are financial dead ends, a potentially large investment for a potentially very small profit.

For-profit insurance companies are, by far, the greatest threat to human life that has ever been visited upon a suffering humanity. With a profit motive, they're literally saying we want to get your money and we don't want to pay out anything. This leads to all sorts of abuses from "pre-existing conditions" to denial of payment after the fact. ANYTHING they can do to keep people from receiving claims, they do. And when they can't do that, they raise their rates based on their own standards. When people can't afford their health care, they often die or go bankrupt.

Even hospitals, doctors and the like all scrimp or over-do, costing billions in over-charges and missed diagnoses.

It all comes down to money. If the actual costs of doing business is all that is being paid for, with shortfalls being covered by the Government, we could use Medicaid and Medicare income to run health care for everyone in a semi-nationalized, but government cost-controlled manner. This would mean more people could afford to pay for their insurance, everyone can get insurred and the government uses existing funds to cover those who can't afford insurance instead of paying exorbitant amounts to line the pockets of companies and corporations.

In the end, the Government runs most health care in industries they paid for and repaid to the American people. Private companies have their costs controlled regarding profit and wages. Investment is curtailed in Health Care (unless the government wants to issue bonds to help raise take-over revenue, which wouldn't be a bad idea) and profit is no longer a factor in the US, but enough financial incentives exist to keep the field manned and staffed.

Granted, this idea needs to be tweaked for practical implementation, but this provides the framework upon which true health care reform can be built.

So much for the 'Free' Market - 05/06/2007

Imagine, if you will, you're the CEO of a company that does manufacturing. You produce widgets. There are several other companies who produce widgets as well, but we'll get to them later.

Your profits are good, but you want them better. The last thing you'd do is call your factories and tell them, "Stop making widgets." After all, in a free market economy, what one company fails to produce, another will produce more and reap more profit. The company which fails to make enough loses business and profits. The natural thing to do, when wanting more profits, is to make more widgets. Lower the per-unit cost of manufacturing the widgets. Or make a better widget that everyone has to have.

Now, take that philosophy and add one thing to it: Collusion.

You and all the other Widget makers get together and they say, "Look, we have our boy in the White House now, so we can pretty much do what we want, but we have to make it look good to sell it to the public. So, we'll be sure to have breakdowns, 'routine maintenance' and other interruptions in the overall market supply of widgets, and we can all raise our prices on the widgets and make a ton of money."

"Wait a minute, " you ask, "won't people just stop buying widgets?"

"That's the beauty of the plan," you're told. "Everyone has to have widgets. And we're locking out everything else that can replace widgets. If we act together, we can control the widget prices for the whole country."

"Isn't that illegal?" you wonder.

"Sure!" you're told. "But with our boy in the oval office, and controlling the widget policies, who's going to stop us?"

Now, while the above scenario is fictitious, one can't help but wonder about the way gas and oil prices are manipulated. Instead of one company increasing production, or stockpiling gas, or helping people find a way to use less gas (as IF!), the gas companies are spending billions of dollars trying to find more gas. If one tenth the amount invested in finding more oil is instead spent on finding and developing alternative energy sources, the dependency of the people all over the world on gas would be cut by 20% every five years.

But this assumes a long-term plan and philanthropic (or at the very least ethical) motives on the part of the oil companies. Unfortunately, all companies in America operate with a quarterly profit mentality. That is, if it's not going to make a profit this quarter, fuck it. If it will make a profit this quarter, do it. Ethics and, in many cases legalities, be damned. This, by the way, sums up the whole Harvard Business School course.

So, with this mentality, of course, everything will be done to boost profits without regard for the consequences.

How to combat this egregious raping of the world's resources?

Two ways: First of all, nationalize the entire energy production industry in the US. With America as wired and dependent on energy as we are, it's a matter of national security that the energy flows properly. Next, set the prices at wholesale plus 10%. Prices will continue to fluxuate, but not to the extremes we've seen during the Bush administration. Finally take that 10% and use it to finance research and development of alternate energy sources, starting with decentralizing energy production.

Let's face it, if an entire town can be darkened by snipping two wires, we are way too vulnerable to terrorist attack. But if every house and business was independent of the energy grid through the use of fuel cells and solar/wind/hydrogen, etc, then it would be utterly impossible to take down a power grid. With energy of that nature available, electric cars become economically viable, and the pollution and lust for oil - especially foreign oil the profits of which still are the number one contributor of terrorist acts and states in the world - will whither and die.

If no one wants widgets, the prices will fall regardless of how many widgets are or aren't being made. If the demand for oil drops, so does the flow of money to fund terrorism. And if the power grids go away, even replacing the oil production with solar energy production won't alleviate the hemorrhage of profit from oil sales.

The only thing free about the 'free market' is the reign the oil companies have in screwing the rest of the world. And it isn't going to stop until they're made to stop.