Health

The approach the world has taken to tobacco control holds many lessons for the COP-15 Climate Change Conference in Copenhagen. A newly-published article in The Lancet (available with free registration) summarizes the many similarities between tobacco control and climate policy, and how the lessons learned from tobacco control can be applied to the way countries approach climate policy.

There was a time, in the early 1990s, when health insurance companies devoted more than 95 cents out of every premium dollar to paying doctors and hospitals for taking care of their members. No more.

Since President Bill Clinton's health reform plan died 15 years ago, the health insurance industry has come to be dominated by a handful of insurance companies that answer to Wall Street investors, and they have changed that basic math. Today, insurers only pay about 81 cents of each premium dollar on actual medical care. The rest is consumed by rising profits, grotesque executive salaries, huge administrative expenses, the cost of weeding out people with pre-existing conditions and claims review designed to wear out patients with denials and disapprovals of the care they need the most.

This equation is known as the medical loss ratio (MLR), an aptly named figure that is widely seen by investors as the most important gauge of an insurance company's current and future profitability. In a private health insurance industry that collected $817 billion this year, a 14 percentage point difference in the MLR represents $112 billion a year! Over 10 years, that would be more than enough to pay for health reform.

Here is a letter the Center for Media and Democracy's Wendell Potter recently sent to the Senate about the health care reform efforts and corporate spin:

My name is Wendell Potter, the former insurance industry insider speaking out about how insurance companies have hijacked our health care system in service of Wall Street's relentless profit expectations. I am joined in this letter by Andrew Kurz, a former chief financial officer for Wisconsin Blue Cross and Blue Shield who shares these concerns.

We stand together for immediately reforming the plainly broken U.S. health care system with its spiraling premium costs and harmful loopholes. Business as usual is taking a terrible toll on Americans, on government budgets, and on our nation's ability to compete in the global marketplace. This is unacceptable and unsustainable.