Private Profit and the Public's Health: Which is More Important?

Health care is pretty complicated, and insurance coverage is even harder to understand.This is the message that comes through clearly from the interviews being done by Dr. Paul Gordon and recorded on his blog, https://bikelisteningtour.wordpress.com. Dr. Gordon is taking a unique sabbatical, riding his bicycle across the country from Washington (DC) to Washington (state), interviewing regular people, mostly in cafés and such, about their take on Obamacare. 

The economic status of these people varies from poor to pretty well-off (but none really wealthy), from well insured to uninsured. Their political perspectives range from “everyone should be covered” to “benefits just make people lazy”. Three recent quotes: ‘People use Medicaid as a crutch’, ‘You can’t penalize someone for not having health insurance when it’s so expensive and the economy is doing so poorly’, ‘Here’s my take on it – everyone should have insurance’. What they share with each other, and with most of us, is a general lack of understanding of how Obamacare works (or doesn’t) and why. The flaws in Obamacare are the result of the political tradeoffs that allowed insurance companies to continue to have control and make huge profits, but this is often not clear to most people.

Here is something that is easy to understand, however: when you call “911” as you have been trained to do in an emergency, and they don’t come. Or they don’t come for a long time. Or they come with inadequate supplies. Who do you get angry with when you, or your loved one, dies? The government? They are surely in part at fault, even though they probably contracted the service out, to save money, probably because voters want to pay less tax. But there is another reason, explained in an excellent special article in the New York Times, “When you dial 911 and Wall St. answers” (June 26, 2016). The piece, by Danielle Ivory, Ben Protess, and Kitty Bennett, details how many city services, including ambulance services, are provided by companies that are owned by “private equity firms”. These are companies whose investment capital comes from wealthy individuals and particularly from pension funds, unlike banks whose money comes from depositors. They are even lessregulated than banks, and thus more able to pursue their core mission, making profit:

Unlike other for-profit companies, which often have years of experience making a product or offering a service, private equity is primarily skilled in making money. And in many of these businesses, The Times found, private equity firms applied a sophisticated moneymaking playbook: a mix of cost cuts, price increases, lobbying and litigation.

Whoa. This is starting to get complicated again. Banks vs. “private equity” vs. just plain old for-profit businesses? They are really just different forms of for-profit, and provide a stepwise progression, from public services operated by government for the benefit of the people, to private companies that are contracted by government to do a service but might care about doing it well, to having those companies owned by banks who really just want to make a profit, to having them owned by private equity companies who care about nothing but making a profit. The photo accompanying the Times article is of Lynn Tilton, owner of Patriarch Partners (an ironic name, given that she is a woman), which owned the emergency services company TransCare that served many East Coast communities. TransCare went bankrupt, leaving those communities without emergency medical services. Ms. Tilton’s picture is accompanied by the quote from her reality television stint “It’s only men I strip and flip.” As a poster child, she could become the Martin Shkreli of ripping off necessary public services the way he was of ripping off consumers of life-saving drugs.

“The business of America,” Calvin Coolidge is often paraphrased as saying, “is business.” This perspective, that it is not about doing things that are best for the American people, is based in a belief that capitalism – “business” – will, through the magic of the market, eventually meet those needs. OK, maybe not those of people at the margins, people too poor to buy, so maybe we need a safety net. But most people. A similar statement appeared today in the print edition of the Kansas City Star from KC Mayor Sly James, discussing the controversy over replacing the terminals at Kansas City International Airport with one big, new terminal. Surveys consistently show that the large majority of Kansas Citians (84% in this article, “Regarding KCI’s future, city ponders a new flight path”) like the current arrangement, with short security lines and easy access in and out from one story terminals, but the airlines and big businesses do not. In the large-type quote accompanying his picture in the print edition (but, along with the photo, left out of the online edition), Mayor James said “The people of this city need to be convinced of what I believe is a basic reality, that this airport is about a lot more than ‘how fast can you get out of your car and get to your gate?’” Right. Business interests first. Take that, 84% of Kansas Citians!

Because they most obviously involve life and death, emergency medical services and firefighting (yes, firefighting too has been contracted out to companies owned by private equity firms!) get the greatest play in the Times article, but many other services (like water!) are in the same situation: controlled by companies whose goal is to make a profit rather than to provide effective service for people. This is what happens when municipalities are starved of funds because people vote to cut taxes.

Whether it is health insurance or emergency medical services or municipal water, the system becomes very complicated and hard to understand when it is trying to meet conflicting agendas. When the need for people to receive critical, health-producing service (fire and police protection, clean water, garbage collection, ambulances) is compromised by provisions built into contracts (or the law) for companies (insurance companies, banks, private equity firms) to make profit. I guess it is fine if these services can be effectively and reliably provided by for-profit companies, but when their pursuit of profit through “a mix of cost cuts, price increases, lobbying and litigation” conflict with actually providing services, there is a big problem. In the case of emergency medical services, the problem was that “…many newly insured Americans turned out to be on Medicaid, according to the Kaiser Family Foundation. Medicaid restrictssome of the most aggressive billing tactics.”

A variety of other difficult to understand strategies are also employed at the macro level to place the interests of wealthy corporations above those of the people. These include the unlimited political contributions permitted by the Supreme Court’s Citizen’s United decision, incredible gerrymandering of congressional districts so that we have states where the majority of voters vote for Democrats but most districts are solidly Republican (see the New York Times Book Review “Where votes go to die”, June 26, 2016), and the provisions of the Trans-Pacific Partnership (TPP) that prevent national governments from regulating multi-national corporations.

We could solve this if there was a single, over-arching principle, always codified into law, that the interests of the people as a whole always trumps the profit potential of corporations. I vote for that.

Medicaid expansion and uncovered lives: are people meaner in the South?

I have lived in a number of places, from New York City to Texas, Illinois to Kansas. Politically and socially there are very different norms that prevail, which are demonstrated by the difference in who we elect and what policies we choose to legislate. And, yet, in all of these places people are people. They can be kind and generous or mean and selfish. As individuals, they love and care for their children, or sometimes don’t. They are respectful of others, or not. In all places. And yet it is clear that there are major regional tendencies to policy that must reflect the local and regional values even though people are not necessarily nicer or meaner. I think that my blog posts have made clear my positions on many issues, particularly those related to health and to social justice.

Obviously, self-interest has a lot to do with what people believe, what policies they support, and which politicians they vote for to implement those policies. To a large degree, it is economic – what is good for me and my family, as illustrated in the old Clinton campaign mantra “It’s the economy [stupid]”. Of course there is more than that. If people voted mostly for their economic self-interest, we would have a very different set of national policies because there are so many more poor and middle-class people than rich, and in the last decade especially so many more middle-class people descending toward poor than ascending toward rich. Many of the policies we have would only be supported by those who are both rich and selfish, the latter being only a portion of the rich. And yet, so many of our policies only benefit the very richest. When it is “the economy”, it is usually good for the wealthy and big business, but not necessarily for all of us. And it is more so in some states and regions. We are, not individually but as a group, meaner some parts of the country than in others.

Access to health care and the means to be healthy (having the opportunity to have a home, and good food and a job and a reasonable opportunity to care for the needs of yourself and your family) is one important arena in which we are meaner in some places than others. We know, for example, that expansion of Medicaid under the Affordable Care Act has varied not only by state but largely by region. Since the ACA intended people under 133% of poverty to be covered by this expanded Medicaid (paid by the federal government, 100% for 4 years and then 90%), they are not eligible for health insurance exchanges. Thus, if their state did not expand Medicaid, they are unable to get coverage. This is the map of states that have expanded Medicaid; clearly, it there is a strong regional difference:

This figure from the Kaiser Family Foundation, showing the regional focus of non-expansion of Medicaid in the Southeast, South Central, Plains and Mountain states, is included in a very interesting piece in the Huffington Post by Harold Pollack of the University of Chicago, “Martin Luther King wouldn’t be very happy with this map”, posted on King’s Birthday holiday, January 19, this year. What he is referring to is that the South, the area King was from and spent most of his time working in (much of which is shown in the movie “Selma”) is one of the areas most affected. But Pollack makes the point that it is actually much worse, and that the South has the vast majority of uncovered people because some of those geographically-large Mountain and Plains states haven’t got very many people. Other states that have not expanded Medicaid, like Wisconsin, have other programs covering a large number of those who would be eligible for an expanded Medicaid. We have seen maps of the US re-drawn to make the size of states proportional to their population, where California and Texas and Florida and New York are huge, and Mountain states tiny. Pollack asked Harvard researcher Laura Yasaitas to show the states re-drawn to have their size proportional to the number of uncovered people. The results are even more amazing:

Because of their larger population, Southern states now obviously account for the vast majority of uncovered people, with the most populous states – Texas, Florida, Georgia, and North Carolina seeming huge. The two states Kansas City borders, Kansas and Missouri, are pretty big (Missouri is the one above Arkansas, the blue keystone in the middle, and Kansas is to its west, over Oklahoma which is recognizable because of its panhandle). Montana, Wyoming, and Utah fade not because they are covering people but because of their small populations. California and New York only show up because the mapmakers artificially pretended there were a couple of thousand uncovered people so they wouldn’t drop off the map altogether.

As Pollack points out, the two states that have benefited the most in terms of fewer people being uninsured are Arkansas, the keystone mentioned above, and Kentucky, the dark blue state above and to its east. This is because these two, southern/border states, had very large proportions of uninsured as did the rest of the South, so showed the greatest increase in covered people when they expanded Medicaid. Arkansas’ expansion created poignant stories in places like Texarkana where the poor folks in the Arkansas half were now able to get coverage, while those in the Texas half were not (see the NY Times “In Texarkana, uninsured and on the wrong side of the state line”, June 8, 2014). The lesson is that Medicaid expansion could benefit even more people if it were implemented in these large-population states, with real significant changes in the actual and potential health status of lower-income people there.

But they haven’t done it and are unlikely to. The political will is not present. There are anti-ACA crusaders in many states, but they are particularly prominent in the South, which already has the highest proportion of poor and needy people and the lowest levels of social services. Clearly, this has a lot to do with race – that historically and in the present many of the poorest people in the South are African-American (and, especially in Texas, Latino). This makes Dr. Pollack’s invocation of Dr. King particularly relevant. And particularly poignant. Racism has been one of the dominant themes in America, and while it certainly exists in all parts of the country, it has never been as institutionalized as in the South (remember slavery? Jim Crow?). And to those who say it is not like that anymore, we don’t have Bull Connor, or the bridge in Selma anymore, we are the New South, look at the map above.

I really don’t think that the people in the South, any more than in Kansas or Missouri—or Montana and Wyoming—are meaner than they are in other parts of the country. So why do they elect people who institute policies to make it look like they are?