the contrarian - THE TOAST OF THE TOWN

The toast of Washington, D.C. is a woman.

She’s not a Senator, nor a Congresswoman, nor a jurist, nor even a member of the Obama administration.  Furthermore, hers is not a household name.  But, nevertheless, glasses are being raised to her all over town.

No one is having a greater impact on the outcome of the healthcare reform movement than the woman responsible for all this uncorking, popping and clinking. And if the final, legislative results turn out to be at odds with the best interests of the public and the desires of the electorate, no problem.  That doesn’t matter to those involved in the growing celebration.

The members of the healthcare industry are toasting to the near certainty of a profitable outcome and our Washington politicians are raising their glasses to their enlarged “campaign” bank accounts and to the additional favors they’ve received.

This is what counts in Washington and Karen Ignagni has been there to provide “what counts,” not only to the right people but also in the most effective way.

Ignagni is president of America’s Health Insurance Plans (AHIP) which makes her the most powerful lobbyist on Capitol Hill representing companies that offer health, dental, disability and long-term care coverage.

Way back on July 12, 1999, the New York Times reported: “In a city teeming with health care lobbyists, Ms. Ignagni is widely considered one of the most effective. She blends a detailed knowledge of health policy with an intuitive feel for politics,"

Earlier this month, the Washington Post said: “If President Obama is going to  'succeed’ in passing health care reform legislation this year, he’ll need to go through Ignagni.”

So, let’s take a look at that word “succeed,” and its companion word “success.” They might just turn out to be the key to understanding what’s really happening here and how effective Karen Ignagni has actually been.

First of all, and of great significance, it seems quite unlikely at this point that the reform measures being considered will provide any degree of “success” in cutting the costs that have made our healthcare system the most expensive, by far, on earth. We are supposed to believe that the high cost is due to the large number of uninsured and, while it is of obvious value to have these people covered, it is far from certain that, by doing so, the costs will be significantly reduced.

Personally, when I hear of the outrageous charges that are routinely itemized on hospital bills and when I become aware of the high drug prices that our government is actually protecting, not to mention the rapidly escalating insurance premiums that have nothing to do with the uninsured, I feel that the healthcare industry’s gravy train is in little danger of being slowed down, let alone being derailed.

Further, there hasn’t been much evidence to suggest that the current reform efforts are going to “succeed” in improving the quality of the care we receive.  With Medicare cuts of hundreds of billions of dollars being threatened, it seems likely that, if anything, our average longevity may end up comparing even less favorably with other industrialized nations than it does today.  Furthermore, there’s been no apparent effort to address our unacceptably high infant mortality rate.

Unfortunately, therefore, the next survey of the World Health Organization is likely to show that the taxpayers and patients in the United States will be continuing to fail to get their healthcare money’s worth when stacked up against other nations.

In fact, the way things are going in Washington, those words “succeed” and “success” seem to be totally eluding the public at large and tumbling only onto the healthcare industry’s side of the ledger.

First and foremost, the industry has scored a huge “success” as far as the uninsured are concerned. At the present time there is broad agreement that most Americans will be required to purchase health coverage and that means tens of millions of new customers for the insurers. Congressman Dennis Kucinich (D-OH) said today that this will add $50 billion to the industry’s coffers.

Subsidies will be available for the millions who can’t afford it, and they will probably come from one or more of several possible sources, including Medicare payments to doctors and hospitals, taxes on the so-called Cadillac plans and, just possibly, taxes on the wealthy.

Wherever these subsidies do come from, however, it won’t be from the profits of the insurance companies. In fact, another flower in the industry’s bouquet of “success” promises that there will be no limit on what insurance companies can charge their new customers.

On the other hand, in yet another and striking “success” achieved by the industry, there will very likely be a strict limit on the degree of competition the insurance companies will face from any new government insurance plan. In fact, based on today’s developments in the Senate, it appears that the public plan will be designed so that it will not undercut the insurance companies. In other words, there will be no competition aimed at keeping the companies honest, a change that represents a complete reversal from one of the basic, original objectives.

And more “success” has headed the industry’s way as a result of the president’s agreement, early on, to continue the policy of prohibiting the government from negotiating the cost of drugs under Medicare and to continue to prohibit Americans from purchasing cheaper prescriptions from pharmacies in Canada and Europe. Both of these issues were high on the list of priorities for the drug industry.

In addition, despite the growing complaints concerning the way health insurers deny coverage, the bills pending in Congress “succeed” in protecting the industry from any meaningful change. Patients will continue to have little power to challenge the decisions of the insurance companies, decisions that often involve life-and-death situations.

In short, nearly everything spells “success” for the healthcare industry, especially for the insurance companies, and, since the public increasingly seems to be left in the lurch, one might well wonder if the word “reform“ properly belongs anywhere on the package.

No small amount of credit for this goes to Karen Ignagni, the toast of the town. Mark Merritt, a long term lobbyist who heads up the Pharmaceutical Care Management Association summed it up pretty well this week when he said: “While so many in this town have been playing checkers, Karen has been playing chess.”

The situation is and will continue to be frustrating for most Americans. Significantly, however, as the process moves through its various stages, it is relentlessly peeling off the outer layer of our political system to reveal, for all who care to look, a core so rotten as to turn one’s stomach. This may, in fact, be the movement’s saving grace.

In the meantime, we might all consider raising our glasses to Karen Ignagni who has, if nothing else, demonstrated that her competence in manipulating the system is light years ahead of those we have elected and counted upon to hold the public trust.

Cheers, Karen…….

Dave McGill, News Correspondent

Dave’s column, “The Contrarian,” generally published every Friday, to Gather Essential News and other groups will sometimes present a contrary view to various aspects of the news, or an alternate take on the conventional wisdom of the day. It will also often appear on other days of the week

Dave has been a senior officer of an eastern insurance company, involved in economic projections and investment strategy, president of a Midwestern mortgage banking company, and a financial consultant in Southern California, serving clients in the field of commercial real estate development.

You can find all of Dave’s “the contrarian” columns at: http://gather.com/thecontrarian. Keep up with Dave’s other postings and Gather activity by joining his Gather network at: http://atadaskew.gather.com. You’ll find Dave and other News correspondents, plus celebrity content and plenty of news experts at: news.gather.com.