by Deb Cupples | Yesterday, the Washington Post
reported that representatives of the health care industry sent a letter to Obama Administration officials, pledging to
"stem" increasing health care costs by about $2 trillion over the next
10 years. The Obama Administration seems to be eating it up.
Nobel Prize winning economist Paul Krugman commented:
"Are there reasons to be suspicious about this gift? You bet — and I’ll get to that in a bit. But first things first: on the face of it, this is tremendously good news.
"The signatories of the letter say that they’re developing proposals to help the administration achieve its goal of shaving 1.5 percentage points off the growth rate of health care spending. That may not sound like much, but it’s actually huge: achieving that goal would save $2 trillion over the next decade."
I adore Dr. Krugman, and I agree that slowing the rate of cost increases would be a good thing -- better than not slowing it.
Big BUT coming: the health care industry's efforts are far shy of what they should be.
Instead of simply reducing how high health-care costs rise, companies should be outright reversing the price gouging they've engaged in over the past eight or ten years.
The tables after the jump illustrate that the folks running health-care-related companies have been raping us consumers sort of like the oil companies have.
Note that profits are calculated after expenses -- i.e., after exec's and managers funnel billions of dollars into their own personal pockets in the form of salaries, bonuses, stocks, perks, and other forms of compensation.
Every dollar in an exec's pocket (or in a company's profit margin) is an extra dollar that we health-care consumers paid.
Table 1. Reported Profits for Fortune's Top-12 Drug Makers (2004-07)
| Year |
Profits |
Approx. Change |
|
2007 |
$78.6 billion |
- 0.1% |
|
2006 |
$79.4 billion |
+ 27.8% |
|
2005 |
$62.1 billion |
+ 17.6% |
|
2004 |
$52.8 billion |
n/a |
Table 2. Reported Profits for Fortune's Top-5 Insurers/HMOs (2005-07)
| Year |
Profits |
Approx. Change |
|
2007 |
$11.7 billion |
+ 11.4%
|
|
2006 |
$10.5 billion |
+ 12.9% |
| 2005 |
$ 9.3 billion |
n/a |
If it look like a massive redistribution of wealth, that's because it is. Again, it's similar to American consumers making oil-company executives rich by paying higher gasoline prices (and like all those bank execs that received TARP funds after paying themselves more than a tad handsomely).
In addition to that, there's healthcare contr actor fraud -- but that's another story, and I don't have time to get into it again just now.
Other Buck Naked Politics Posts:
* Contractor Fraud: Driving Up Healthcare Costs
* Why Are Drug Prices so High (GAO & Other Sources)?
* FDA Hid News About Baby Food with Toxic Chemicals?
* FDA Failed to Follow up on Mercury-Tainted Corn Syrup
* Drug Companies Scammed Taxpayers & Cancer Patients
* Once Again, FDA Promotes Pharma's Interests
* Pharma-paid Doctors Write Risky Scrips for Kids
.
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