With Congress in recess for the month of August, lawmakers have returned to their states and home districts where they have gotten a very mixed, and in some cases very strident, message on health care reform.
In many cases it hasn’t been a pretty picture. It’s often hard to tell fact from fiction, as the rhetoric ramps up and overtakes reason. But the hoopla is just a precursor to this fall. Congress will return in September, and sometime in the next several weeks a reform bill will emerge. President Obama will also put forth his own proposals.
Then the real debate will begin. Small businesses can and should play a pivotal role in the discussion because so many of the problems with the current system — from high costs to a lack of options — affect them directly. As I wrote last week, small business owners are far from monolithic in their views and no single group can or should claim to speak for them.
As an example, I singled out the most prominent group, the National Federation of Independent Business (NFIB), to illustrate how politics and political ideology often play a role in shaping the so-called small business agenda in Washington.
Naturally, the NFIB responded to my column, which is fine and well. That’s precisely why I write every week. My goal is not so much to present a point of view, but to provoke a dialogue that will hopefully illuminate and provide a better understanding of issues confronting entrepreneurs. All discussions need to start somewhere, and I want my column to be the jumping off point.
As such, I don’t normally respond to comments; I’ve already had my say. But I thought the comment I received from Dr. Bob Graboyes, who identifies himself as the NFIB’s senior health care advisor, illustrated my point even more.
By his casual use of the honorific “Dr.,” some readers might get the impression that he is a medical doctor. He’s not. He actually holds a Ph.D. in the most dismal of sciences, economics, from Columbia University in New York.
Many of his conservative colleagues think Columbia is a sinkhole of radical left-wing liberalism, so let me set the record straight — it’s an excellent institution. In any event, Dr. Graboyes hardly represents that point of view.
To the contrary, Dr. Graboyes is senior fellow at the National Center for Policy Analysis, (NCPA) where he specializes in health care policy. The NCPA, a self-described “conservative think tank,” happens to be financed by the insurance industry.
The group’s founder, Dr. John C. Goodman, considers himself the “Father of Health Savings Accounts,” and is widely credited, along with former Sen. Phil Gramm and conservative columnist Bill Kristol, “with playing a pivotal role in the defeat of the Clinton Administration’s plan to overhaul the U.S. health care system,” according to his bio.
Dr. Goodman (economist, not medical doctor) also runs what he calls the only “right-of-center health care blog on the Internet.” Rest assured, the NCPA’s health care agenda is perfectly aligned with that of the insurance industry. What’s more, the NCPA uses many of the scare words about health care reform in its Web site posts that have generated the recent backlash against opponents of President Obama’s plan.
Certainly, the NCPA, Dr. Graboyes, and Dr. Goodman are entitled to their views, and their honorifics. I just want to know how an individual who works for an organization funded by giant insurance companies, with a pronounced political agenda, comes to be the “senior health care advisor” for a group that represents small businesses.
In the coming weeks, as the debate heats up, you will hear plenty from the insurance industry both directly and indirectly. So here’s another view — Wendell Potter’s. Until last year, Potter was head of corporate communications for Cigna, the country’s fourth largest health insurance company.
As journalist Bill Moyers stated recently when he interviewed him on public television: “Potter spent nearly two decades playing for the side that has opposed health care reform, from the Clintons forward: he sat on policy committees, crafted executive messages, cajoled the press, and witnessed firsthand the promises made — and broken.”
This summer, before the Senate Commerce Committee, Moyers continued, Potter went public for the first time. “The industry and its backers are using fear tactics, as they did in 1994, to tar a transparent and accountable, publicly accountable health care option as, quote, ‘government-run health care,’” Potter told the committee.
“What we have today,” he continued, “is Wall Street-run health care that has proven itself an untrustworthy partner to its customers, to the doctors and hospitals who deliver care, and to the state and federal governments that attempt to regulate it.”
During the Moyers interview, Potter went into detail about how increasing corporatism, dwindling competition, and the slavish need to meet investors’ and Wall Streets profit expectations has distorted the traditional role of health insurance.
He said that today, the game is all about controlling what’s known as the “medical loss ratio,” an industry term for how much of a premium dollar the insurance company pays to actually cover medical costs. In the mid-1990s it was 95 cents; today it’s down to 80 cents, he said. And one of the chief ways insurance companies control the ratio is by purging employer accounts.
“If a small business has an employee, for example, who suddenly has a lot of treatment, or is in an accident, and medical bills are piling up, and this employee is filing claims with the insurance company; that’ll be noticed by the insurance company,” he explained.
“And when that business is up for renewal, and it typically is up once a year, up for renewal, the underwriters will look at that. And they’ll say, ‘We need to jack up the rates here, because the experience — when I say experience, the claim experience, the number of claims filed — was more than we anticipated.’ So we need to jack up the price. Jack up the premiums. Often they’ll do this, knowing that the employer will have no alternative but to leave. And that happens all the time.”
Indeed, for far too many small businesses, his explanation sounds very familiar.
The point is, in the coming debate, it’s critical for small business owners to look beyond the rhetoric, the scare tactics, the political agendas and in some cases blatant misinformation and stay clearly focused on what truly is in their best interests.