EDITOR'S NOTE: The following commentary is from Detroit Rep. John Conyers, Jr., ranking member of the House Judiciary Committee
WASHINGTON - Medicare is arguably one of the nation’s most successful and cherished public insurance programs. The program covers approximately 47 million elderly and disabled Americans, and helps pay for hospital, physician visits, and prescription drugs. It is truly hard to argue with success.
The traditional Medicare program, coupled with a supplemental private insurance policy, covers most of our seniors’ medical bills, with far less co-pays and out-of- pocket costs than private insurance.
Therefore, proposals to privatize Medicare — like Rep. Paul Ryan’s — have been met with such fierce opposition, because it was revealed in the national media that privatization meant much higher out-of-pocket costs for seniors. National polls have shown strong general support for maintaining Medicare or even increasing funding for it.
However, Medicare costs are projected to increase from $519 billion per year in 2010 to $929 billion in 2020.
The simplistic argument we often hear from conservatives is that Medicare is a costly federal government program because all federal government programs are inefficient and therefore costly. According to their line of reasoning, privatization is the only way to save money.
The truth is that there are several other ways to strengthen Medicare, but there has been a false debate in the nation regarding the rising costs of Medicare.
This may be partly due to not understanding a fundamentally key concept regarding current healthcare policy — there are no effective cost-containment mechanisms in place to control the private market costs of prescription drug costs, corporate hospitals and medical technology which are the main drivers of Medicare costs.
Research by respected nationally renowned economist Dean Baker shows that the federal government and Medicare beneficiaries would save $600 billion dollars between 2006 and 2013 if Medicare were allowed to directly negotiate prices with pharmaceutical manufacturers.
One study by Families USA found that the Veterans Administration was able to negotiate substantially lower prices for the top 20 drugs used by seniors, compared to private Medicare part D plans.
It would only make sense for there to be bipartisan support for Medicare to be able to use the full faith and credit of the federal government and be able to negotiate down the rising costs of prescription drugs.
According to Forbes magazine, hospital charges represent about one third of total healthcare spending — $718 billion altogether. Twenty four hospitals in this country with over 200 beds make an operating margin of 25 percent or more — a profit margin that compares favorably to drug giants like Pfizer, and easily beats the operating profit margin that General Electric reported in 2009.
We can no longer continue to have America’s hospitals make these kinds of large profit margins, when the health of our senior citizens and the fiscal health of our nation are at stake. It will take much needed political courage to address the root causes of rising Medicare costs — a Wall Street-dominated healthcare system.
America must transition to a non-profit improved Medicare-For-All program, if we are to have any chance of realistically containing over-all healthcare costs. That’ s why I have reintroduced H.R. 676, the Expanded and Improved Medicare For All Act, that would provide for a single-payer healthcare system, providing all Americans with healthcare coverage.
Countries in Europe, Japan, and Taiwan have been able to effectively contain their healthcare costs for decades through their very successful universal healthcare systems — without waiting lines, rationed care, and out of control taxes.
America can learn invaluable lessons from other nations on how to control healthcare costs, and the time has come to be open minded about their success and honest about our need to change course from our corporate-dominated and inefficient healthcare system.