Sunday, December 20, 2009

Nationalize the U.S. Private Health Insurance Industry to Create Universal Health Care

The December 18, 2009, Bill Moyer’s Journal conversation with Robert Kuttner and Matt Taibbi was a Call to Action which provoked me to write the following proposed amendment and commentary.

The Federal Register: The Constitutional Amendment Process

The Constitution provides that an amendment may be proposed either by the Congress with a two-thirds majority vote in both the House of Representatives and the Senate or by a constitutional convention called for by two-thirds of the State legislatures. None of the 27 amendments to the Constitution have been proposed by constitutional convention. The Congress proposes an amendment in the form of a joint resolution. Since the President does not have a constitutional role in the amendment process, the joint resolution does not go to the White House for signature or approval. …

The Archivist submits the proposed amendment to the States for their consideration by sending a letter of notification to each Governor along with the informational material prepared by the OFR. The Governors then formally submit the amendment to their State legislatures. …

A proposed amendment becomes part of the Constitution as soon as it is ratified by three-fourths of the States (38 of 50 States). …

The time has come: “We The People” must call for a constitutional convention through the concerted action of two-thirds of the State legislatures —34 States — to enact universal health care as a Constitutional right in the United States.

Proposed Amendment to The United States Constitution: Universal Health Care

The government shall provide all citizens with free and equal health care, including all tests, treatments, medications, therapies, procedures, surgeries, hospitalizations, and long-term care that:
1) are legal and approved by the government,
2) are done according to government standards by government licensed physicians and practitioners,
3) are not subject to malpractice claims or lawsuits of any sort, and
4) are affordable within an overall government health care program budget that does not exceed 15% of the government’s GDP.

Government licensed physicians and practitioners who work solely within the government health care program shall be exempt from any need for professional malpractice insurance of any sort: they shall be personally immune in all cases from any legal claims or lawsuits that could result from patients who suffer injury, bad outcomes, or death while under their care. However, such physicians and practitioners shall be subject to loss of their license for professional malpractice and/or negligence, and may also be subject to criminal charges, and to their penalties if found guilty.

Personal health insurance and long-term care insurance shall be unnecessary, except to provide desired coverage for experimental care and extraordinary end-of-life care that is not approved by the government program.

The government health care program shall be paid for by two dedicated and approximately equal taxations: a national sales tax (excluding food and energy purchases) and a corporate and personal tax on equity in real property based on government assessed value (excluding hospitals, schools, governments, and approved religious organizations).


I am proposing a nationalization of the private health insurance industry in the United States, and that the nationalization be accomplished by expropriation according to the Canada model.

Critics will assert that my proposed confiscation is extreme and wholly un-American, but such thinking is duped. The facts are these:
1) There is an Economic World War happening now, and the U.S. is losing.
2) Private health insurance companies served a useful purpose in the pre-computer and pre-Internet world that did not have electronic transferring of funds capabilities, and that relied solely on hard-copy medical records keeping and typewritten patient billing, but those days are long past, and private insurance companies are now obsolete in the true sense that they no longer serve a useful purpose.
3) Private health insurance companies survive as a consequence of entrenchment, monopoly, collusion, government protections, exemption from the Sherman Anti-Trust Act, and inertia; they do not survive as a consequence of their own merits or by their real value to the marketplace, because they have no real value — they take without giving anything in return.
4) Private health insurance companies are the “bookie” middle people who front casinos in a fixed game that the house always wins: the business of private health insurance companies is betting on the health and lives of those who are willing to pay them premiums — a sum in advance of or in addition to the nominal value of something; a high value or a value in excess of that normally or usually expected.
5) The Cash Reserves of the private health insurance companies are the accumulated premiums held in trust for eventual payout to health care providers as needed to meet the obligations of the insurance contracts with policyholders. The Cash Reserves are not earnings or profits or entitlements to be legally absconded or wantonly spent by the companies. Rather, in every moral sense, the Cash Reserves belong solely to the insured policyholders.
6) To expropriate the private insurance companies through nationalization of the industry would be to keep for the policyholders the money that is rightly theirs; to keep the employees of the companies employed as government employees during the transition period of consolidation and thereafter where possible; to maintain effective policies and procedures in parallel comparisons while superior uniform policies, forms, and practices are being developed; and to remove an entire layer of needless and unjustifiable profit taking from the U.S. health care delivery system.
7) All U.S. railroads were nationalized in 1917 because of World War One, but were returned to private ownership after the war. During World War Two, President Roosevelt had the government seize both the railroads and the coal industry under wartime emergency authority. According to Encyclopedia Britannica: “Between 1940 and 1945 automotive firms made almost $29 billion worth of military materials, a fifth of the country’s entire output. The list included 2,600,000 military trucks and 660,000 jeeps, but production extended well beyond motor vehicles. Automotive firms provided one-half of the machine guns and carbines made in the United States during the war, 60 percent of the tanks, all the armoured cars, and 85 percent of the military helmets and aerial bombs.”

Recent Total Cash (most recent quarter) amounts for the seven largest private health insurance companies in the U.S. were the following:

mid-Sep’09 >> mid-Dec’09

WellPoint (WLP): $17.36B >> $18.22B +
UnitedHealth (UNH): $8.15B >> $10.50B +
Humana (HUM): $6.17B >> $7.35B +
Aetna (AET): $3.31B >> $3.86B +
Health Net (HNT): $1.98B >> $1.76B -
Coventry Health Care (CVH): $1.82B >> $2.05B +
Cigna (CI): $1.14B >> $1.05B –
Total = $39.93B >> $44.79B +

The question is this: Who is the rightful owner of that $44,790,000,000.00?

Again, I believe the Total Cash Reserves of the private health insurance companies is money held in trust for the citizens who are paying premiums to those companies in exchange for agreed upon health insurance coverage. In my opinion, that $45 billion is not private corporate money with no ownership strings attached. Even though corporate law might allow for the highway robbery that would result if WellPoint ceased operations and liquidated — walking away with more that $18 billion in cash — no reasonable person would agree that that would be a fair outcome. Yet here we are with that potential as a present reality.

How many private health insurance companies are there in the U.S. at this time? In Oregon alone, one website lists the following:

Health Net of Oregon
Kaiser Foundation Health Plan of the NW
LifeWise Health Plan of Oregon
ODS Health Plan, Inc.
PacificSource Health Plans
Providence Health Plan
Regence BlueCross BlueShield of Oregon

Certainly, there are many hundreds of private health insurance companies in the U.S. today that together probably have combined Total Cash Reserves far exceeding $200 billion. If the private health insurance industry in the U.S. were nationalized through expropriation, there would not be a cash flow problem at all, nor would there be any start-up problems or confounding logistics problems; there would simply be a change of ownership.

A single-payer health care system has nothing to do with insurance; the whole concept of "insurance" must be anathematized from American thinking if the U.S. wants to go forward.

"Insurance" supposes the existence of a group reserve account one has access to as needed as a consequence of a gambled buy-in that is actively maintained through defined premium payments made in a timely fashion without fail. Everything about that set-up is morally wrong. Furthermore, everything about that set-up is unnecessary.

The word "insurance" does not apply if American society makes a commitment to professionally care for all people who are sick, injured, and/or diseased who need care — and "all people" means "all people."

Ask yourself: Would you want your son or your daughter — or yourself — to be cared for by professional medical personnel in a foreign country if the need suddenly and unexpectedly occurred, meaning: unconscious accident victim or heart attack victim or stroke victim or overwhelming flesh-eating body infection or whatever? Would you want treatments delayed or denied in a foreign country if ability to pay could not be proven (again, in a medical emergency in which you or your loved one might be unconscious and without on-body identification)?

The U.S. guideline should be "The Good Samaritan Rule," and it should function by the thinking that is commonly known as "The Golden Rule," which is: Do unto others as you would have them do unto you. If someone — anyone — needs professional medical care, you give him/her professional medical care, that is: "give," not "sell" — without question, and without hesitation.

Do not think in terms of "rights." Instead, think in terms of the moral obligation to be a decent citizen of the world — to be someone who lives by "The Golden Rule," which is not a rule that even gives consideration to something so legally binding as "rights." Be a Good Samaritan because you want to be a Good Samaritan, not because you are legally required to give aid and care to someone in need.

Essentially, the U.S. must embrace the concept of "grace" as a first principle. "Grace" does not respond to personal merit, entitlement, or anything that smacks of deserving. Rather, "grace" is constitutionally blind and abidingly ignorant of all such considerations. Indeed, "grace" gives without measure, and without expectation of reward — or even of acknowledgment. To "grace" someone is to bless someone; it is a grant, not a loan.

There should be no profit motive in the U.S. health care delivery system, except that which motivates efficiencies — and efficiencies are crucial. The thinking of Dr. W. Edwards Deming needs to be put at the very center of the U.S. health care system in a way that becomes defining, and that then radiates the thinking throughout the whole system with a mighty transforming force.

Read here: The Deming System of Profound Knowledge, Dr. W. Edwards Deming's 14 Points, and Seven Deadly Diseases and A Lesser Category of Obstacles.

Dr. W. Edwards Deming videos: 1, 2, 3, 4

The most important reasons why the U.S. should nationalize the current private health insurance industry and transform it into a universal health care system are these:
1) We cannot afford not to. Our status as a world economic power is at stake. Our economic competitiveness in all world markets — including our own — is seriously compromised by our current health care system. A single-payer system would actually function as a government support for U.S. businesses — an honest subsidy that would free businesses to focus on business.
2) The FDA would finally do its job with a vested interest in the outcome. As is, the FDA is a compromised agency that allows business interests to successfully lobby it for approvals. If the U.S. government were providing universal health care coverage, the U.S government would not tolerate sloppy work from the FDA. Furthermore, the U.S. government would give "First Priority" status to ridding the grocery store aisles of foods and pseudo-foods that have no nutritional value, especially those food and drink items fostering poor dietary habits that lead to obesity and diabetes. If the U.S. government is made to pay for health care, the U.S. government will actively engage in a continuing effort to improve the American diet.
3) The U.S. government will have all the financial incentive it needs to actively promote physical fitness from cradle to grave, including brain fitness that promotes general good health while fighting against dementia and Alzheimer's disease. This should result in government supports for public recreational facilities of all sorts, including swimming pools, gymnasiums, and playing fields in public parks.
4) The EPA would finally do its job with a vested interest in the outcome. If the U.S. government has to pay for universal health care, industry and manufacturing processes that poison the environment and cause ecological disasters that then cause sickness, disease, and cancer epidemics will not be tolerated. Certainly, sewage treatment technologies will be improved with great urgency. Certainly, rivers will be cleaned up. Certainly, groundwater sources will no longer be polluted by agricultural practices.

In every which way, the United States would become a much healthier place to live.

The Key Point is this: Whenever you buy an insurance policy, you are gambling that you can better predict your health future than can the insurance company. The insurance company has mountains of heartless factual data with which to make its gamble, and all you have is a personal denial of your aches and pains and a hopeless expectation that you will not die a mortal death. The sad truth is that your insurance company is hoping you will die in an accident and be pronounced dead at the scene so an ambulance trip to the hospital can be replaced by a hearse trip directly to the mortuary. The almost $45 billion in Total Cash now being held by the seven largest private health insurance companies in the U.S. is proof positive that the insurance companies are winning the game handily.

Furthermore, you can faithfully make on-time premium payments to your private health insurance company for more than 30 years with no usage whatsoever and then be unable to make a premium payment or two due to unfortunate circumstances only to then find thereafter that your policy has been outright canceled for non-payment of premiums. There is no cash value, no accumulated equity, and no ongoing goodwill whatsoever in a private health insurance policy. Rather, every month is the first month and potentially the last month — a month-to-month “gambled” obligation on both ends.

As stated above, the U.S. is now engaged in an Economic World War that we are losing. This reality has to be made part of the national health care debate. If the EWW were recognized, the justification for nationalizing the U.S. private health insurance industry would be easy to make, especially if government lawyers and accountants unmask the beast that is now robbing the U.S. population through exorbitant insurance premiums.

So nationalize the U.S. private health insurance companies: put what is certainly more than $200 billion in Total Cash Reserves in a designated public trust that will initiate the cash flow of a universal health care system, and then manage that newly established system through the existing infrastructure of the now existing private insurance companies until those companies can be intelligently consolidated and made more efficient through the Deming processes mentioned above.

The taxation model proposed above in the amendment has a deeper beauty to consider. The national sales tax would not tax food (including restaurant dining) and energy (including home heating and cooling costs, and vehicle fuel costs). The “corporate and personal tax on equity in real property based on government assessed value” would tax banks on their equity ownership in real properties, which should encourage refinancing or other arrangements to build and maintain homeowners’ equity when foreclosure is otherwise imminent.

Finally, “the strings attached” are these:
1) Every company, corporation, organization, and government entity that would no longer have to pay health insurance premiums for its employees would be fully expected either to reduce the costs of its goods and services in the marketplace or to hire additional employees or to do both to the satisfaction of government scrutiny to avoid being harshly financially penalized for war profiteering. The expectation would be for no less than five years duration that the savings in health insurance premium costs would have to be returned to the common good on a dollar-for-dollar basis in a manner that is plainly obvious.
2) Similarly, the removal of malpractice insurance costs must result in a significant benefit to the common good, most likely in a dramatic sustained drop in the fees and charges for medical goods and services. Because the nationalization of the private health insurance industry would result in a single-payer government controlled health care system, this outcome would be government controlled, and would largely be invisible because patients would no longer be consumers — they would simply be patients. However, patients would still be taxpayers, so the plain benefit to the common good would be made visible to all who wanted to see it.
3) The Health Care Costs “Economic Bubble” would be burst in a highly controlled fashion as a consequence of the nationalization of the private health insurance industry. Over time, medical education in the U.S. would be revolutionized — with a drop in narrow specialization and an increase in general practice being one expected outcome, and a significant drop in medical school costs being another. The goals of a career in medicine will become more “common good” than “personal gain,” because a single-payer health care system will inevitably become more rural and less urban: urgent care clinics will significantly lighten the load of hospital emergency rooms, and enhanced wellness care will reduce the need for chronic sickness care. Some health care professionals will be paid less, but only if the current value of their work is not justifiable by the light of day.

None of the above will happen without a fight. Plainly, the U.S. Congress cannot be trusted to do the right thing. The private health insurance lobby is all-powerful in Washington, D.C., but not in the halls of every State legislature in the Nation. The U.S. Congress will come unglued if a successful effort is made to call a constitutional convention. Unfortunately, the future of America might depend on something as bold as that, so please join the fight.

Steven A. Sylwester
December 20, 2009

To fully understand the need for universal health care, it is necessary to become educated about the sad and devastating circumstances that impact human lives as a consequence of birth defects, genetic conditions, bodily injuries, and chronic diseases. Click on each listing below to access an informative website: