McHugh Watch

President-elect Obama is set to role out an economic stimulus package that will be the 21st century’s New Deal.  In his words it will include putting “people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children and building wind farms and solar panels, fuel efficient cars and the alternative energy technologies that could free us from our dependence on foreign oil and keep our economy competitive in the years ahead.”  He is essentially talking about government doing what it is supposed to do: build infrastructure as the scaffolding for economic viability.

Now is Mr. McHugh’s time to assert all those years of seniority and influence that he claims to have.  The roof top highway as a direct connector between Watertown’s I-81 and Plattsburgh’s I-87 has been talked about for years.  In fact, it already has a putative number: Interstate 98.

The North Country has long been plagued by a fundamental lack of transportation infrastructure. Rural residents have long commutes to jobs across a wide expanse and manufacturers have difficulty getting raw materials and good to markets.  Good transportation attracts new business, enhances competitiveness, improves amenities, and reduces transportation related accidents and injuries.  The construction of the rooftop highway will not only result in immediate job creation but most importantly provide a foundation to build our economy so that we can wean ourselves off government subsidization that this region is so dependent upon.  A chance to attract and entice real industry that makes things that people and other nations want to buy. The Federal Highway Administration estimates that every dollar invested in the highway system yields $5.60 in economic benefits over and above the temporary jobs created to build the highway.

Mr. McHugh signed on to the contract with America in 1994 that, among others, called for term limits.  Since then Mr. McHugh has opposed term limits reasoning that they put rural districts at a disadvantage by reducing the importance of seniority and the influence that it brings.  Mr. McHugh is 16 going on 18 years in Congress. Transportation infrastructure is one of the few items that a congressman can legitimately claim credit of bringing to their district.

This is where the rubber hits the road for Mr. McHugh.  It is time for him to finally perform and not miss this golden opportunity to build the rooftop highway.

An endorsement from the UAW local 465, based at the Massena GM Powertrain plant, appeared in the Watertown Times today. The UAW prepared and submitted to the US Department of Labor petitions for Trade Adjustment Assistance and Alternative Trade Adjustment Assistance. According to the endorsement letter, within hours of filing the petitions, our congressman wrote a letter of support to the Department of Labor.

These are programs that assist individuals who become unemployed as a result of increased imports from, or shifts in production to, foreign countries. This provision of assistance was made possible by HR 3009, the Trade Act of 2002. It passed the House on a voice vote on November 16, 2001, so we don’t know how our congressman voted on it. We do know however, that on July 27, 2002, he voted against final passage of the bill after it returned from conference committee. So, if he had his way back in 2002, there would have been no program for the UAW to apply for assistance for its members and certainly no reason for him to write a letter of support.

He gets an endorsement for writing a letter of support for petitions that were prepared, researched and submitted by the UAW for a bill that he did not support. The implication of the endorsement is that because of the letter of support, the UAW members have been afforded assistance. The fact is, the petitions were evaluated and approved based on their merits by the Department of Labor, plain and simple. Congratulations to those who did the hard work of preparing the petitions. Their approval had nothing to do with our congressman’s letter and certainly, he can’t be thanked for approving the program in the first place.

As a further reason for endorsing Mr. McHugh, the UAW Local President cites Mr. McHugh’s submission of the Forewarn Act of 2007, HR 3662, for which he has obtained one cosponsor and has gone no where, being referred to and will die at the end of this congress, in committee. Other than give the workers and government officials 90 days warning before a plant closing, it does nothing to keep the plant open.

The Massena GM Powertrain plant is going to close in 2009 with the direct loss of about 500 jobs at the plant. Additionally, another 300 jobs are in jeopardy that are dependent upon the lost Powertrain jobs. The Massena plant is closing for the same reason GM, Ford and Chrysler are in such financial trouble now: they are not making cars that Americans want to buy.

The Japanese looked at the long term, knowing full well that inexpensive gas would not last forever and designed and built hybrid cars that get 50 miles per gallon. Meanwhile, the American auto industry rewarded its executives with obscene salaries and bonuses that were based on the short term semiannual horizon success of the SUV. There were no incentives to look to the future. So while the Massena plant closes and “Joe autoworker” loses his job, the GM executives pocketed their cash and got away with it.

The sad story is that government, including our congressman, could have prevented the Massena closing and, along the way, the American Auto Industry meltdown. Since the Big Three automakers’ executives had no incentive to look to the long term, Washington could have made that happen by passing increased fuel efficiency standards – increasing CAFE standards. Just as we did in 1976, demand that the auto industry make fuel efficient cars. However, our congressman, along with the Big Three management and, if the truth be known, the UAW, consistently opposed increasing CAFE standards.

Now the Big Three want a bailout to build fuel efficient cars. I’ll bet dollars to donuts that the executives will still get their obscene compensation and we taxpayers will underwrite them, just as we are going to underwrite the failed bank executives’ continued exorbitant compensation.

So Mr. McHugh gets the UAW nod for opposing the very bill that provides what little relief the Massena auto workers will get, for opposing the one policy initiative that could have saved their jobs along with the rest of the auto industry and for sponsoring a bill, that does nothing, only has one other co-sponsor, will go no where and will die at the end of this session.

– but, let’s give credit where credit is due: he did write a letter.

The first thing young doctors learn when they answer a resuscitation call is – the first pulse you take is your own. In other words, a life is in your hands, the decisions you make are critical and are literally life and death. Slow down, think clearly, be calm, get the best information, prioritize and make the right decisions. In the midst of what is often chaos, with a lot of well meaning people in disarray, you have to think clearly and critically.

After the bailout bill was defeated in the House last Monday, the stock market had its biggest drop in history. We heard “financial Armageddon”, “global catastrophe”, “economic collapse”, “market meltdown” and “credit paralysis”. The next day, the market gained back two thirds of it losses. Overnight, banks froze up and the LIBOR, the overnight interest rate that major banks lend to each other and major corporations shot up to a record 6.88%. The LIBOR has been spiking after all the major events in the last few weeks. However, just like all the other spikes, it dropped today by almost half to 3.79%. From Spring 2006 to Spring 2007 the LIBOR was nearly constant at 5.25% and no one was clambering to give away $700 Billion.

The TED spread, the difference between the LIBOR and the T-bill rate also went down. It compares how banks judge their risk of lending to the 100% safe treasury bill.

Wall Street only dropped a miniscule amount today.

Slow down, take your pulse. Get the critical information. Do not believe others. Get and believe the information and data in front of you. We are still here and there has not been a financial Armageddon and the markets have not melted down.

As I write the Senate is voting on the bailout bill. This can only be termed madness. A rush of lemmings off the cliff. The thinking of World War I. A small spark, an assassination by unknown anarchists, leads to 13 million deaths, countless injured and maimed and no one knows why and they can’t stop it. It goes on until both sides are exhausted. This is a stampede. Crazed with fear by “experts” who are not looking at the latest information.

I’ve said it before, there is something very wrong. Are the banks that are remaining manipulating the credit markets to assure the bailout and save their own skins – or – is this a jackpot payoff to the FOGs – friends of George?

There is no financial meltdown occurring. The LIBOR rates will decrease as they have after every spike and banks will lend. Lehman fails, LIBOR spikes to record levels; Lehman is swallowed and bought, LIBOR falls and banks keep lending. The data tells us differently than what the “experts” are auguring.

Bernie Sanders has it right in his Senate address. If we want to truly get this economy moving, invest in our infrastructure. Build the alternative energy sources. End our dependence on foreign oil that puts us at an enormous trade imbalance. Invest in solar, wind and yes, nuclear. If we are going to bailout, bailout the homeowners. Certainly they are no more responsible than the banks that engorged and enriched themselves with reckless no money down and no documentation loans.

Now its up to the House. Slow down, take your pulse, calm down and make the right decisions. This is life and death.

“Socialized Medicine” – Mr. McHugh’s distortion of a National Health Insurance program still rings in my ears. A distortion he purposely and repeatedly used to denigrate a noble and way overdue solution to a pressing national problem. Of course he did it to appeal to his voter base’s primal instincts. To acknowledge that it was a valid solution to a problem that desperately needs solving was to oppose his President, who he has enabled for eight years. To acknowledge a real solution would only invalidate his useless grandstanding tax break bills that solved nothing and went nowhere. His opposition to National Health Insurance was a calculated stance to maintain his populist (both Republican and Democratic) base. A base that hates taxes but has no compunction about pork spending and a government subsidized economy, so long as it comes back to this district

Today he had a particularly hard choice between maintaining his conservative populist ideology that abhors government intrusion into the private sector and deserting his President or voting to “socialize” the banking sector. While the healthcare of his constituents doesn’t rise to the necessity of creating a real solution, the needs of all those poor distressed and suffering bankers, CEO’s and Wall Street wheelers and dealers prompted him to give away the shop to the tune of seven hundred billion dollars. Yes, Mr. McHugh, how does the phrase “socialized banking” strike you. How about “socialized investment” or, what the heck, a “socialist economy.” The bailout bill is an extortion of money from the American taxpayer, and John McHugh is all in favor of it. He has a lot of explaining to do to his base. I think they are catching on.

Let’s cut him some slack though. He’s desperate for the ranking position on the Armed Service committee and a sure way to forfeit that position is to buck the Republican leadership, including George Bush.

Let Wall Street drop. It will come back. Reckless banks are being taken over by stronger banks. Barclays gets Lehman Brothers. Citigroup gets Wachovia and Bank of American gets Merrill Lynch. So what. They are acquiring them in a fire sale, just as they should. That I can take this position with real credibility is because I just lost a lot of money today. Mr. McHugh has never had to save and has nothing in the market. His retirement pension is guaranteed by we taxpayers.

Yes, I will wager that the prospect of loosing a fraction of their fortunes will make the pirates of Wall Street real sick. Not to worry, they’ll still have their health insurance.

Now let’s turn and create a real solution to the credit crisis. There are two moral hazards from which to choose. John McHugh chose the moral hazard of bailing out reckless bankers and CEO’s. The majority of the House, as do the majority of the American people, reject this. The other moral hazard is correcting the root cause of the credit crunch: the individual homeowners who are in or going into foreclosure. Say what you want about those homeowners in trouble, but the mortgage brokers and bankers who obscenely profited from these loans also share in the blame. Bailout the little guy. Role back the interest rates to their initial values that were affordable and restructure the loans. As I noted a few days ago and published in the Watertown Times yesterday, rolling back the variable rates, including allowing bankruptcy judges to restructure loans allows everyone to win – including the banks and the secondary market investors. They just don’t win as big.

Guaranteed, that solution will win a convincing majority of the House.

The following was submitted as a letter to a number of prominent North Country Newspapers four days ago on Tuesday, Sept 23rd. It has not appeared (no hard feelings) so I publish it here:

There is something very, very wrong.

We are told that the root cause of the financial “crisis” is the mortgage meltdown. Less than three percent of all mortgages are in or going into default. The variable mortgages that are defaulting were taken out at teaser rates and when the rates readjusted upwards, are no long affordable. The important point is that when the rates were at teaser rates, for the vast majority of families, the monthly mortgage payments were being made. If this is the underlying reason for the present financial crisis, then the obvious solution is simple. It doesn’t take a trillion dollar bailout of Wall Street and their banks to solve the problem. The simplest and most straightforward solution is to legislate that mortgage rates are rolled back to the teaser levels. Everyone wins, except the banks and Wall Street investment funds don’t win as big. But they still win, and if that had been in place two weeks ago, Lehman Brothers and Merrill Lynch would still be in business as independent entities.

It turns out though, that wasn’t good enough for the banks. They have fought allowing bankruptcy courts to readjust mortgage rates tooth and nail. They are willing however to suck off one trillion dollars of our taxes to cover their lost asses(ts) . After their excesses, they now want us to bail them out. It’s not good enough to make a little money and survive. No, they want the big easy money of the federal government, and they still want to foreclose on those who they lead into the swamp over their heads. What’s more, they want to keep their multimillion dollar bonus and their houses in the Hamptons. Their greed has no limit. They know no shame – only money.

I, for one taxpayer, am incensed that this Republican President, once again, wants to dramatically increase the size of government. Talk about tax and spend. The, congress, along with our congressman, needs to stop this bailout dead in its tracks. If the root cause is truly defaulting variable mortgages, roll back the rates and everyone wins – but that is way too simple and too effective.

My only conclusion is that we are not being told the whole story. It would certainly be in character for this administration to once again be lying to us. This is a repeat of the Iraq war congressional resolution. The big rush job based on the big lie. Stop it now.

Ted Ford, author of the Danger Democrat blog today thanked me for a news link that I sent him regarding Gov. Palin. He called me his, “Friend, fellow lefty, sole thoracic surgeon in Sackets Harbor and former congressional candidate.”

Yes, I am a good friend of Ted, Sackets Harbor’s (not to mention the entire North Country’s) sole thoracic surgeon and a twice former congressional candidate. However, I consider myself a moderate in the middle of the road rather than a “lefty”.

For example, take my concept of National Health insurance. Yes, I want to combine the best of the “left” by instituting Medicare for all, where everyone contributes and everyone is covered, with the best of the “right” by keeping the private nature of healthcare delivery where hospitals and doctors are still private entities along with each of us having the sole choice of our healthcare provider. I would call that middle of the road.

In my debates with Mr. McHugh, he continually invoked the “lefty” pinko red specter of “socialized medicine.” In fact, his almost exact phrase at a Watertown debate was that “you can put lipstick on a pig but it is still a pig.” Sound familiar. He knew full well that he was mischaracterizing the concept of Medicare for all. What he was really saying was that most of us that already have healthcare coverage (particularly those in congress), don’t give a damn and don’t want to help others who are not covered. Those without coverage are still a minority, one sixth of the population, whose votes he doesn’t need. His appeal was to the basest of our nature – I’ve got mine, I don’t care about you.

I knew that it was a good solution, because no one liked it. The young didn’t want to pay because they’re immortal and don’t get sick. The old didn’t want to pay because they’ve already paid through their Medicare withholding. The rich didn’t want to pay because they would pay more and the poor didn’t want to pay because they don’t have any money. The employed didn’t want to pay because some else was paying for them. So while everyone wants coverage, no one wants to pay. It’s a great plan. No special interests get special treatment. It sounds equal and very middle of the road to me.

Healthcare reform is coming, and my only regret is that I will not be at the table. It will be written by lawyers who are more interested in process rather than by surgeons whose success is measured by results. Hillary Clinton’s 1990’s debacle brought us managed care – the worst of processes. No surprise, written by someone trained in the law and not in medicine.

No one would argue today that Medicare is “socialized medicine.” Mischaracterizing a position, just like exaggerating, shading, stretching or embellishing, is not telling the truth. When you don’t tell the truth, you’re lying. Lipstick on a pig.

Mr. McHugh introduced HR 6321, the Home Energy Affordability Tax Relief act, on June 18, 2008. Political IV summarized the bill in his post of 7/23/08. Mr. McHugh, in his press release, claims that he is leading the effort to reduce heating costs by offering a $500 tax credit for those with heating bills more then $1500. The credit will phase out for individuals with incomes greater then $60,000.

In all respect for our congressman, he is leading nothing, except garnering headlines in an election year. This bill has no chance of passage, much less a committee hearing. It is the same manipulative, cynical stunt that he pulled in 2004 when he co-sponsored HR 4597, the National Dairy Equity Act. In fact, the timing of his HEATR act is exactly the same as the Dairy Act. Like the HEATR act that was introduced this June 18th, the Dairy act was introduced June 16, 2004. That bill never made it out of committee to see the light of day.

The time to introduce legislation is at the beginning of the term, not when congress has less then six weeks left in its session. Congress will soon be in recess for its summer vacation and is aiming to adjourn in late September for campaigning. This is one of his typical last minute populist election year bills, that is ill conceived as he does not even make a pretense as to how to pay for it. To be blunt, this bill is a joke for the very reason that its timing assures that it will not be taken seriously.

Not that Mr. McHugh didn’t know about the problem of rising heating costs throughout the district for the past two years. Rising energy costs are not new. Gas was nearly $3.00 a gallon in the summer of 2006.

This is not leadership, but the workings of a well accomplished skillful master politician whose only goal is to win yet another election and rack up another term towards the twenty year mark when he can collect a full congressional pension on our backs.

There are only two types of job performance. One relies on perception, the other relies on results. For those of us whose jobs demand results, nothing makes us see more red than those who flit through life on false perception. They make nothing, produce nothing and do nothing. We have been suckered by the same tailors who “made” the emperor’s new clothes. If we can’t see the clothes, we are stupid. When are we going to wake up and see the naked truth as it is.

Part of campaigning for a congressional seat is having Editorial Boards with the various newspapers across the district. These take the form of interviews with two or more representatives of the newspaper, usually with the either the publisher and/or the managing editor in attendance. Whether it was the Syracuse Post Standard, the Watertown Daily Times, the Plattsburgh Press-Republican or the Ogdensburg Journal, the question invariably asked was: why should we elect you when you will not be able to match the money that can be brought back to the district by a seasoned member who has seniority.

So those are the pragmatics of being a congressman. You are measured by how much money you can raid from the US Treasury and bring back to the district. Mind you, these questions come from unabashed Republicans who run these newspapers, the most partisan of which is John Johnson of the Watertown Times. The same Republicans who demand tax cuts but want the cash under the table from Washington. I always thought it ingenuous and certainly inconsistent with their desire to “starve the beast” so that the government would have to cut back on its spending. That never stopped them from singing the praises of our congressman about all the money that he brought back to the district.

My usual answer was that I was running for congress to enact national policy and – what was good for the United States, was good for the North Country. They just rolled their eyes and smirked – how naive. I would then quickly add, being a member of the majority, no matter how junior, was better than being a member of the minority no matter how senior.

DangerDemocrat posted a blog entry about John McHugh’s prowess at bringing home bacon to the district. Yes, Mr. McHugh brought back $18,906,700 to the 23rd. The real question is, how does that compare to the bacon that freshman house members in the majority can command and bring back. It turns out, it’s chicken feed. No only that, but the money only goes to a relatively few people.

Mike Arcuri, the freshman from the 24th, brought back $28,871,968 and Kirsten Gillibrand, freshman from the 20th brought back $23,849,244. So with all that seniority and all that “influence”, two upstart freshman do better than our congressman. So much for the conventional wisdom that seniority is everything in congress.

I will guarantee you, just as he has done in every other election, about now, our congressman will associate himself with every drop of grant money that comes back here, regardless of the fact that the individuals who actually applied for the money and filled out the grant paperwork did all the work. I personally would be insulted if I did all the leg work and some else took the credit. The mystique is that somehow, without the congressman’s “influence” the grant would not have been successful. That is exactly what he wants you to think, but it is so far from the truth.

To those of you who think that the only reason we send a representative to Washington is to bring back pork money, the clear conclusion is that anyone in the majority party is going to do better than our present congressman, regardless of whether he gets to be the ranking MINORITY member on the Armed Services Committee.

So what could he have done to help all of us? For one thing, he could have backed and sponsored legislation for national health insurance. Not only would that have covered each and everyone of us, but after the cost savings of reigning in the insurance companies, the drug companies and the trial lawyers, it would have saved every man, women and child in this district $2,480. He could have sponsored and backed legislation that would get us out of a war that we should never have started and where we do not belong. Considering that the Iraq war is conservatively going to cost Three TRILLION dollars, that would be a savings of $10,610 for every man, woman and child in the district. So instead of bringing back the equivalent of $29.07 for each person in the district, he could have saved each of us, $13,090 – money in our pockets.

Of course, if he did that, he couldn’t collect the campaign contributions from the drug companies, the insurance companies, and the defense contractors to keep him in office and guarantee that we will be paying his pension for the rest of his life. You see, it really all does come down to money.

This week we will look at where our healthcare dollar is being spent and where our money goes. Be forewarned: this is tough stuff and can’t be presented in a sound bite. You are going to have to wade through the numbers and follow the money. Doing so, you will begin to understand how wasteful our healthcare financing is and will begin to formulate a broad outline of how the system can be redesigned to be effective and equitable. The bottom line: we can save between $350 - $450 billion by redesigning the system. That’s a lot of money – as much as the yearly military budget.

We’ve already established that we spend more, in both absolute and proportional dollars to our Gross Domestic Product (GDP), than any other country in the world. For that expenditure, we have some of the worst healthcare measures in all the industrialized world¹.

So where does our money go? It is instructive to look at the Security and Exchange Commission (SEC) filling of UnitedHealth Group² (open in a separate page so you can follow along). Through the purchase of Oxford Health Plans and Mid-Atlantic Medical Services, United HealthGroup is now the dominant health care insurance provider in New York. Note that the filings are expressed in millions of dollars, so that any of the four or greater digit numbers represent Billions.

United HealthGroup’s revenues come from direct premiums ($65,666 billion) and administrative health care services ($4,268 billion) that it sells in the open marketplace. These services are mostly to large corporations or government entities – including New York State. From these revenues it expends $53,308 Billion in health care coverage. Do the math and United HealthGroup retains nearly 25% of the health care dollar that it collects directly as a premium or an administrative service that it sells because the coverage plans are so complicated.

There are literally hundreds of plans that can be selected. All this proliferation of choice is of course a smokescreen for reducing coverage all the while appealing to our fantasy that we are being given the “freedom” to choose and determine our own destiny. United HealthGroup is so good at charging more and providing less that its corporate profits (net earnings) have increased a billion dollars each year, from $2.4 billion in 2004 to $3.1 billion in 2005 to $4.1 billion in 2006.

Net Earnings (profits) are reported after all expenses are paid, including the salaries and benefits to the corporate officers, most notably, the $1.6 Billion in stock options to the company’s CEO, William McGuire. To put this into perspective, the US spends $1.5 trillion on healthcare and therefore United HealthGroup’s CEO got more than 1/1000 of the entire US expenditure on health care (10¹² – 10⁹ = 10³ = 1000) – but he thinks it’s enough! I’m ashamed to say that he’s a doctor.

Realizing the enormous profit involved, is it any wonder Empire Blue Cross/Blue Shield wanted to convert from a non-profit to for-profit organization. In 2002, New York under Gov. Pataki took the mantra of market efficiency and allowed the conversion. The price was a one time payment to the state. The deal is most succinctly related by Health Affairs³

“On 7 November 2002 Empire Blue Cross Blue Shield (BCBS) culminated a seven-year effort to convert from nonprofit to for-profit ownership, selling 20 percent of its stock and obtaining $417 million in one of the most successful initial public offerings (IPOs) in the history of the health insurance industry. The IPO proceeds and other corporate assets were not used to endow a charitable health care foundation, as is done in most other states, but were transferred to the New York State budget largely to finance wage increases for unionized hospital and nursing home workers. The quid pro quo was the endorsement of a conservative governor by a liberal labor union, contributing to a Republican electoral landslide in a Democratic state and to the governor’s commitment to sustain health care programs in what otherwise was a disastrous budgetary context. The big losers were the community organizations that would have received the largess of a charitable foundation and who instead were left to gnash their teeth, denounce the predatory state, and invoke constitutional objections to one of the most brilliant and sordid chapters in the annals of health policy.”

– some real insight into the sordid side of New York politics.

The same analysis can be applied to Empire Blue Cross/Blue Shield. The parent company is WellChoice, incorporated in Delaware. The SEC fillings of WellChoice shows that is not much better than United Healthcare and retains 23% of our healthcare premium.

Do this for any of the insurance companies in the healthcare arena (should I now call it a racket) and the long and the short of it is that 1/4 of our healthcare dollar does not go for healthcare but rather to insurance companies coffers.

A word about the concept of market efficiency. There is no doubt that successful companies in the private sector are very efficient. That means that they will turn the greatest profit for the least expense. Of course they will – they are there to make a profit. The question is: do we have the financial luxury to allow the insurance companies to make a profit off our healthcare?

No one wants to turn our healthcare mess into a government service mess – see the last post for the ills of making hospitals and healthcare providers into civil servants as is done in Great Britain⁴. Is there, however, another alternative to a private system of health insurance and the true socialized medicine of Great Britain?

The answer can be found in Medicare.

Medicare is essentially public insurance coverage for those over 65 and for the disabled. Its overhead – the cost of running the program – is 3.4%. Of the revenues that Medicare collects, as opposed to the 25% that the private insurance companies keep, Medicare only retains 3.4%. So when “efficiency” is applied to the peoples’ healthcare coverage and the amount of money available to pay for it, Medicare wins hands down.

Realizing the tremendous profits that are involved, is there any wonder why the insurance companies viciously oppose a national health insurance system and why they spend millions (which is really a drop in the bucket compared to their profits) in campaign contributions and on advertising campaigns – remember Harry and Louise of the 1990’s. (Let’s be very clear. Hillary Clinton’s healthcare plan utilizing “managed care” in the 1990’s was a disaster, and we are now left with its private form. So now instead of the government limiting your choice of medical treatment, it’s the insurance companies – they aren’t stupid and are very efficient at extracting profits for minimal performance).

Combine this with the added administrative costs of hospitals and providers, nearly one third, 31% of our healthcare dollar is eaten up – wasted – on administrative costs⁵.

That brings us to our congressman. Why would he oppose an efficient public national health insurance program calling it “socialized medicine”. Follow the money. Over the years he, along with most of our lawmakers, including Hillary, have been generously funded by the HMOs and insurance companies. This funding ensures that the insurance companies get their way. Some of Mr. McHugh’s contributors are:

HealthNet, Inc. $14,000

Humana $7,000

America’s Health Insurance Plans the trade organization for the insurance companies. $2,000
The contributors to this PAC are all the insurance companies, including guess who: United HealthGroup.

What is also notable is the interlocking relationships between PACs. For instance, the Texas Freedom Fund is funded by insurance companies and pharmaceuticals among others, that gives to the CME Fund the gives our congressman $2,000. Follow the money.

I think you can see how corrupting it is, and why our representative, and for the matter, most of our politicians will not do what is best, least expensive and most effective for all of us. The only way to solve this problem is public campaign financing.

Next post: The pharmaceutical industry’s cut of our healthcare dollar.

1. Theophilus, Post 12/06/2007
2. Filing 10-K United HealthGroup, Annual Report 2006
3. Health Affairs 22(4):100-118, 2003
4. Theophilus, loc. cit.
5. Woodhandler, S., Campbell, T., Himmelstein, D., “Costs of Health Care Administration in the United States and Canada,” New England Journal of Medicine, 349:768-75, 2003.

When I first entered politics in 2004 one of the biggest hurdles in explaining my roadmap to healthcare reform was to convince people that the system was broken. I tried to accomplish that by telling them of the 47,000,000 Americans – one sixth of our population – were uninsured. Being uninsured meant that those 47 million would therefore seek the most expensive health care in emergency rooms far into the course of their underlying disease. Early treatment before the ravages of the disease progressed, would not only have been better for those people, but would have been far less expensive. Far less expensive does not mean a few dollars, but rather one or two orders of magnitude less expensive, from the tens or hundreds of thousands of dollars to just thousands of dollars. Disappointingly, most voters didn’t really care about those 47 million, not to mention their 108,000 neighbors who reside in our own congressional district without health insurance.

In that short time, even those who were content with the status quo are coming to realize intuitively that our healthcare system is broken. Their employers are no longer providing unlimited access to healthcare and many are not even providing it at all. Under the euphemism of “choice” each year they are having to pay more for less. It turns out that only the very few can avail themselves to all the treatments that the best medicine in the world has to offer. Of course, that doesn’t include the members of congress – they have the best coverage.

Back then, I tried to use statistical measures of health in comparison to other counties to show we did not have a healthcare system, but rather a “sickcare” system. I would present data as if I were presenting a paper to my colleagues. It turns out the voters just weren’t interested. They were not impressed that of the 30 most industrialized countries in the world, we were number 24 in life expectancy1. Neither were they impressed that our premature deaths were the second and fourth worse for females and males² . They weren’t impressed we were number five in our deaths from heart disease³. They didn’t seem to care that we were number twenty seven in infant mortality with only Mexico, Turkey and the Slovak Republic worse than us⁴.

For all that, we spend over twice for each person than almost all the other countries⁵. In fact, you could even say that the Slovak Republic was getting a good deal. They spend six times less than we do and have an infant mortality just slightly higher than ours. Yes, we spent $1.5 TRILLION dollars last year for the best medicine but nearly the worst health care in the world.

So long as someone else paid, i.e. their employers, most voters didn’t care. These were just statistics and if their neighbors ran into trouble, it was just an aberration of the “best medicine in the world,” and it wasn’t going to happen to them. I’ve often wondered what these voters think of the fund raisers to raise money for those non or under insured who need a transplant or treatment for cancer. You see these fund raisers all the time. Is there something not repugnant that the sick have prostrate themselves and go begging for help?

The voters, however, were very impressed with the draconian phrase “socialized medicine.” John McHugh couldn’t say it enough times. A phrase that was used over and over by the American Medical Association to fight prenatal care in the 1920’s and 1930’s, Harry Truman’s healthcare insurance in the 1940’s and Medicare in the 1960’s^6,7.

In parroting that, McHugh was selling a fantasy, just at Giuliani, Romney, Thompson, McCain and Ron Paul – yes, Dr. Ron Paul – and every other Republican presidential candidate is selling now. The fantasy is that you have unlimited, unfettered access to American medicine. Those fund raisers that we just talked about – they must be scams – because we all know that everyone has access to all the wonders of modern medicine. What these public “servants” are really saying is that they can avail themselves to all of American medicine – the best medicine in the world – and they want to keep it just that way. So long as you are convinced that you have the choice, freedom and ability to tap all the resources of the best medicine in the world, that is just fine with them. Just keep paying your taxes, provide them with cushy benefits, while they sell you a scam – along with Iraq’s weapons of mass destruction, Iran’s nuclear weapon program, Karl Rove and Scooter Libby having nothing to do with outing a CIA agent, water boarding isn’t torture and …” Walt Disney couldn’t do it any better.

I unsuccessfully tried to persuade the voters to change the way we finance health care, not the way we provide it. John McHugh knew that then, as do the Republican Presidential candidates know that now when they stoop into the linguistic gutter and dredge up “socialize medicine.” If there is any country in the world where “socialized medicine” is an accurate description of a health care system, it is Great Britain. That truly is socialized medicine, where the hospitals are owned by the state, all the health care providers are paid by the state and where you have to register at the local GP’s office for your health care. You don’t have a choice of doctors and there is no incentive for hospitals or doctors to provide care. They are paid a straight salary, regardless of how many patients the see. Hence the long waiting lists. Except for Dennis Kucinich (HR 1200)8, that is not what the other Democratic Presidential candidates are proposing.

The financing of health care to provide everyone with coverage is a far cry from the government owning hospitals, doctors, and telling you where you can go for your health care.

I don’t think the American public needs anymore explanations of how broken our health care system is. They now viscerally know it. They’ve been hit in the gut; their wallets feel it and their loved ones can only look in the window and marvel at the wonders of American medicine.

Next post: Now the we’ve got the hysteria of “socialized medicine” out of the way, we’ll find out where our money goes.

1. Tabulation: Organization for Economic Co-Operation and Development, Life Expectancy at Birth, 2007.
Graph: Organization for Economic Co-Operation and Development, Life Expectancy and Per Capita Spending 2007.
2. Organization For Economic Co-Operation And Development, Premature Mortality, 2007.
3. Organization For Economic Co-Operation and Development, Ischemic Heart Diseae Mortality, 2007.
4. Organization For Economic Co-Operation and Development, Infant Mortality, 2007.
5. Organization For Economic Co-Operation and Development, Health Expenditure Per Capita 2007.
6. David Greenberg, “Who’s Afraid of Socialized Medicine”, Slate Magazine, Oct 8, 2007.
7. NPR Morning Edition 12/06/07 read NPR listen:
8. HR 1200 text HR 1200 Summary