This Week In America, June 14, 2013
National Nurses United, 6/14/13
More profits and less healthcare. In some corners of the newsroom the central story of America’s healthcare crisis – profiteering – finally has been discovered. Steve Brill in Time magazine took it on earlier this year and several have followed suit. At $2.7 trillion, the annual U.S. healthcare price tag is the biggest in the world, by far, an indication that there are vast riches reaching investors in the business of illness. There is evidence, as well, that those profits remain prodigious even as increasing numbers of sick Americans forego care.
Eduardo Porter of the New York Times has joined this handful of journalists examining that mega-price tag and bounty in a piece this week, “Health Care’s Overlooked Cost Factor.”
“[F]or all the emphasis on curbing waste,” wrote Porter, “ recent evidence suggests that health care costs are not being driven by intensive use of high-tech procedures as much as by rising prices for even the most humdrum treatments which are today among the most expensive in the world.” And while patient utilization of services is down – people are staying away from doctors and hospitals – costs are still going up, outpacing inflation. According to the Health Care Cost Institute and bluntly referred to in the Times, “the rising health care spending of Americans under 65 in the last two years has been driven entirely by rising prices; not by more use.”
“Between 2009 and 2011 the fee for an outpatient visit to the emergency room rose 17 percent,” reported Porter. “The price of radiology services rose 12 percent.”
Healthcare is a Wall Street darling and an engine of considerable merger and acquisition activity in recent years. Porter warned that consolidation through health industry mergers continues apace-- to maintain revenues and “enhance bargaining leverage.”
Profits skyrocket during the Obama years. With all the talk of austerity, sequestration, the need to belt-tighten and the like, it’s easy to lose sight of the fact out earlier this year that after-tax profits of U.S. corporations have grown by a whopping 171% during the Obama Presidency, “more than under any president since World War II, and are now at their highest level relative to the size of the economy since the government began keeping records in 1947,” reported Bloomberg News. These trends continue today.
Profits are more than twice as high as their peak during President Ronald Reagan’s administration and more than 50 percent greater than during the late-1990s Internet boom, measured by the size of the economy, according to Bloomberg.
“Business leaders cite low labor costs in an era of high unemployment, the Federal Reserve’s easy-money policies, and their own management savvy for the profit boom.”
Beware the “New Normal”. “I’ve been in this economics business for a while,” wrote economist and Nobel Prize-winner Paul Krugman this week. “In fact, I’ve been in it so long I still remember what people considered normal in those long-ago days before the financial crisis. Normal, back then, meant an economy adding a million or more jobs each year, enough to keep up with the growth in the working-age population.”
No more. Unemployment ticked up recently, to 7.6%, and the number of Americans who are out of work, employed part-time but seeking full-time, or have just given up exceeds 20 million. “[T]he employment situation is still terrible and the pace of improvement is glacial at best,” wrote Krugman.
He described “a combination of complacency and fatalism” when it comes to tackling unemployment. “Even the people I consider the good guys, policy makers who have in the past shown real concern over our economic weakness, aren’t showing much sense of urgency these days.”
How can multitudes of unemployed lacking jobs fail to resonate in Washington? These include record numbers of unemployed young adults without a foothold on life? “[T]he unemployed don’t have much of a political voice,” said Krugman. “Profits are sky-high, stocks are up, so things are O.K. for the people who matter, right?”
[Y]ou hear talk about a ‘new normal’ of much higher unemployment…” warned Krugman. “[T]here’s nothing normal or necessary about mass long-term unemployment.”
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