WALL STREET, WITH THE HELP OF THE MAINSTREAM MEDIA, IS WAGING AN ASSAULT ON SOCIAL SECURITY AND MEDICARE

David Rubenstein - Billionaire Who Wants Your Social Security Dollars

Through deceit and manipulation, and with help from the mainstream media, the capitalist elite is waging a frontal assault on Social Security and Medicare.  Make no mistake about it, NPR and PBS are clearly in the MSM, so they won’t be of any help to the elderly who are likely to lose benefits.  Keep in mind that PBS news programs are brought to you by EXXON/Mobile, Ban k of America, Coca Cola and a host of foundations that are designed to be system maintenance mechanisms.  If any social justice issue is discussed on the PBS News Hour, hacks from the Heritage Foundation, American Enterprise Institute, or the Cato Institute will be brought in to oppose the pro-social justice side.

Why are hedge fund moguls such as Peter G. Peterson of the Blackstone Group and David Rubenstein of the Carlyle Group on the PBS Charlie Rose Show making their case for reduction of Social Security and Medicare benefits?  It is rather simple.  They see trillions of dollars in capital sitting in the Social Security Trust Fund and through a reduction in Medicare benefits they see trillions more for themselves in inflated medical devices, pharmaceuticals, and other ventures.

The history of Rubenstein and the Carlyle Group should tell us exactly what they are up to.  After serving in the Carter White House, Rubenstein used his connections to set up a private equity group in Washington, D.C.  He formed a partnership with former secretaries of defense (e.g. Harold Brown), the Bush family, the Saudi Royal family and so on and so forth.  Initially, they bought companies that were primarily doing business as defense contractors.  In other words, they became rich from taxpayer funded defense programs.

How rich?  David Rubenstein has purchased an original copy of the Magna Carta for $21 million.  He is considered one of the wealthiest people in the World.  He and the Carlyle Group will continue to reap benefit from tax dollars poured into useless and inordinately expensive military programs.  But they see real potential in the medical-industrial complex.  Wall Street is literally drooling over what is coming down the road in medical technology.

If that $3 trillion sitting in the SSTF is made available and a reduction in Medicare benefits frees up trillions, taxpayers can pour more into medical devices, pharmaceuticals, bio-engineering, transplantation, and the like.  As beneficiaries receive less in reimbursement for treatment, more taxpayer provided capital will be available for purchase of over-priced products and services.

Here is the ongoing lie told by the Wall Street tycoons that see another fortune in medical care:  “Social Security and Medicare are unfunded liabilities in the amount of $57 trillion.”  They also attempt to include Social Security as part of the Federal Budget.  These are lies that go unchallenged by the likes of Rose on PBS and just about everyone else in print media as well as television.

Given the nature of Social Security as a trust fund with a dedicated tax and a “pay go” rule of operation, it makes no sense to even discuss it in the context of the Federal deficit.  In fact, it is now, and has been through most of its history, “off budget,” which means that it cannot be considered in the calculation of the budget deficit.  The Omnibus Budget Reconciliation Act (OBRA) of 1990 prohibits the use of the Trust Funds for any purpose in the unified budget, including calculation of the deficit.  These provision were included in the Budget Enforcement Act, a sub-part of OBRA.

THE SUNFLOWER ELECTRIC 895-MEGAWATT PLANT PERMIT & REGULATIONS REGARDING HEALTH CARE REFORM: TWO EXAMPLES OF WHY COMMENTING & SHOWING UP ARE IMPORTANT

A considerable amount of public policy is made after legislation is passed.  Much of it is even made outside of the legislative process altogether.  This post concerns the following two cases in point:  (1) the permitting process for an 895-megawatt power plant in Southwestern Kansas, and (2) regulations pertaining to recently passed health care reform (The Affordable Care Act).  Citizens have a right to be involved in these administrative policy making processes!

SUNFLOWER ELECTRIC DIRTY POWER PLANT

 In spite of its unpopularity with Kansas citizens, the Governor has cut a deal with Sunflower Electric to proceed with the permitting process for a dirty, water-wasting, 895-megawatt, power plant.  The only thing this plant will do for Kansas is create some jobs for out-of-state construction workers as well as some permanent jobs for one small part of Kansas, i.e., Garden City.

The rest of the state will reap air pollution and loss of precious water in the Ogallala Aquifer.  None of the power will be generated for the use of Kansans.  So the consequence for most of the state is environmental devastation.

Sunflower Electric, which started as a much needed REA farmer-rancher cooperative, will be able to build an empire.  The advantages to the management of this growth-for-the-sake-of-growth power producer include bigger jobs and more pay.

The permitting process requires public hearings and citizen comments.  According to the Lawrence Journal World on July 24th, “Of 204 comments received by KDHE so far, all but 10 favored the project.”  A large portion of these “favorable comments” came on preprinted post cards submitted by out-of-state construction workers.  This is the way it works.  Powerful companies and unions with a vested financial interest in a project but with absolutely no interest in environmental impact put their considerable resources into overwhelming the administrative process.  We can do the same!  Send your comments to:

                SunflowerComments@kdhe.ks.gov

                Or, with a postmark no later than August 15, write to :

                Kansas Department of Health & Environment

                Bureau of Air

                Attention: Sunflower Comments

                1000 SW Jackson

                Suite 310

                Topeka, KS

 HEALTH CARE REFORM (PATIENT PROTECTION & AFFORDABLE CARE ACT)

One major accomplishment of President Obama’s and the Democrats’ health care reform effort (Patient Protection and Affordable Care Act) was inclusion of a provision that requires insurers to spend at least 85% of your premium dollars on “quality health care” (80% in individual and small markets).  This provision serves one purpose:  to prevent the lavishing of insurance dollars on dividends, salaries, bonuses, perks, and other non-patient goodies.  In other words, hard working Americans pay their premiums for a fair return in the form of services when they need them.

If an insurer’s medical loss ratio (that is what it is called) doesn’t meet the 80% or 85% criteria, the insurer must refund their excess of payout over loss (after all, it is an insurance company that should expect some losses and a fair profit).  Wall Street and the insurers do not like the 80% and 85% medical loss ratios.  They are using the opportunity to influence recently issued regulations that will determine the meaning of “quality health care.”  They want to vastly expand the term to include activities that are unrelated to treating patients.  Here is how they are doing it:

They – or rather their high paid experts – are submitting comments regarding the regulations.  For instance, the Physician Groups for Coordinated Care – a lobbying group in Washington, D.C. – argued that the term should include, “quality improvement initiatives, medical records review, evaluation of appropriate diagnoses, pharmacy treatments (including medication therapy management), clinical data collection and analysis for quality improvement purposes, care coordination activities, patient education, and many of the supporting clinical IT investments and operating expenses.”  In other words, they want the policyholder to pay for their administrative costs and for their efforts to cut their overhead.

You can read the regulations at:

http://www.regulations.gov/search/Regs/home.html#docketDetail?R=EBSA-2010-0010

You can comment on the regulations at:

http://www.regulations.gov/search/Regs/home.html#docketDetail?R=HHS-OS-2010-0004

To date, approximately 140 comments have been submitted by insurance industry advocates while only 20 have been submitted by consumers.  Write in and let the Secretary of HHS know that health care provided should be reasonable given the premiums paid.  If the insurers are intent on escalating premium costs while they deny treatment, charge large co-pays and deductibles, and lavish their excessive profits on management and investors, then the consumer merely absorbs excessive increases without an increase in services.

THE RACIST TEA PARTY CAUCUS PUTS ITS “NUTJOB” AFRICAN-AMERICAN TOKEN FRONT AND CENTER: THE OLDEST RACIST TRICK IN THE WORLD

Michelle Bachman’s racist Tea Party caucus in the House had a press conference yesterday with an African-American woman standing front and center declaring, “We are not terrorists.”  This old trick of oppressing people by finding individuals in the oppressed group who will cooperate with the oppressor has been around a long time.  After all, both Denmark Vesey and Nat Turner were betrayed by other slaves.   Hannah Arendt and Raul Hilberg have written about how some Jews helped round up and ship off other Jews to the concentration camps.

In the more modern phase of a highly sophisticated, complex form of racism/oppression, we have the Michael Steeles and whoever the other African American crazies are that are usually well rewarded for helping right wing Republicans continue racist Republican causes.  This technique will not be examined in the mainstream press.  NBC, ABC, CBS and the like won’t touch it while PBS would only touch it if someone from the Heritage Foundation were brought in to present “the other side.”

A WHITE RACIST POLITICAL MOVEMENT PULLS A RACIST STUNT AND THE FIRST AFRICAN-AMERICAN PRESIDENT IN U.S. HISTORY BEARS THE BRUNT OF THE BLOWBACK

Only in a white racist society would a black President bear the brunt of blowback caused by the racist stunt of a political movement of racists, nativists, and ignorant yahoos – a stunt coordinated with their dedicated cable channel.  Certainly, everyone knows by now that a Tea Party bigot edited a black woman’s speech and made her appear to be hateful toward whites.

She was talking about her transformation from anger toward whites to understanding how poor people of all color were oppressed – it was about being poor, not about being black or white.  The edited tape didn’t include any of this marvelous woman’s thoughts about reconciliation.

It was a lie!  Yes, the Obama Administration did a stupid thing by firing the woman without fully investigating the matter.  Dumb, dumb, dumb – but, given the “white press” and its fear of the Tea Party movement, understandable.  President Obama is accused of racism at the drop of a hat.  Remember the Reverend Wright thing?   

But every news outlet from NBC to PBS made the Obama Administration the story.  This tells me that the so-called professionals in the media are treating the Tea Party just like they treated Joe McCarthy during the 1950s.  Members of the racist, white, right wing – and that is what the Tea Party represents – is attempting to destroy the NAACP just like they destroyed ACORN.

Everyone is jumping all over the NAACP and the Obama Administration without taking into account the aggressive and vicious – perhaps even violent – reaction that comes from the far right whenever they think they have uncovered some perceived racist behavior by African Americans or other minorities.  Let’s just be honest.  The media is either enamored with, or afraid of, these Tea Party idiots.

What I don’t understand is the wailing and gnashing of teeth by the liberal and progressive media on MSNBC.  Ed Schultz and Lawrence O’Donnell have really been laying it on the President. It never fails to amaze me how good the left is at beating itself over the head.

BLAMING SOCIAL SECURITY & MEDICARE FOR BUDGET DEFICITS IS AS RIDICULOUS AS BLAMING WELFARE FOR CHILDREN IN THE 1980s & 90s FOR A BUDGET DEFICIT

The mantra about the dire consequences of a Baby Boom horde hitting retirement age continues unabated amongst the talking heads, on news programs, and in the media in general.  As I indicated in the last post, aging per se isn’t a threat.  However, corporations and industries such as the medical-industrial complex will take advantage of Medicare as well as Medicaid to rip off taxpayers.

I have been writing about and will continue writing about the cost of medical technology and implications of overpriced, overutilized, expensive medical equipment, device implants, pharmaceuticals, and so on and so forth, for health care reform.  In my view, a gradual increase in the proportion of 65+ Americans from 13% to 20% by 2050 should be easily managed in a country with a $13 trillion GDP.

Furthermore, contrary to conventional wisdom, expensive technologies are not concentrated in the elderly population.  Let’s take the left ventricle assist device (LVAD) implant procedure for former Vice President Cheney.  According to a New York Times interview with, Dr. O. H. Frazier, leading surgeon in the LVAD implant procedure, of the 170 LVADs he has implanted, 24 of the patients were 65+, while 11 of that 24 were 70 or older.  None of the patients receiving the device were older than 76.  Check it out:  “A New Pumping Device Brings Hope for Cheney,” New York Times/Science Times, Tuesday, July 20, 2010:  http://www.nytimes.com/2010/07/20/health/20docs.html?_r=1&ref=health

FORMER VICE PRESIDENT CHENEY’S LEFT VENTRICLE ASSIST DEVICE. WHAT DOES IT SYMBOLIZE FOR THE FUTURE OF HEALTH CARE REFORM?*

 

Former Vice President Cheney, suffering from congestive heart failure, would certainly die without either a heart transplant or an assistive implant.  He received what is known as a left ventricle assist device, which is illustrated in the picture preceding this post.  As is the case with the former Vice President, patients needing an appropriate, advanced, life-saving medical technology should receive it. But this post is not, per se, about the former Vice President.  It is about the unsustainable cost of medical advances in a society in which a disease-inducing lifestyle is commonplace. 

Let me first say, however, that I wish the former Vice President the best.  Although I believe that as a politician he deserves no respect from me for his political views and actions, I believe that as a sick human being he deserves compassion.

Now to the unsustainable cost of medicine as it is now practiced.  The type of fix to Mr. Cheney’s problem will, in the final analysis, cost several hundred thousand dollars.  These and other advanced medical techniques – along with inordinately expensive pharmaceuticals – are undertaken in hundreds of thousands of cases each year.  The soaring cost of these proliferating medical advances will undermine health care reform.  Why?

In the current, profit-driven health care system, government policy is being steered away from human ecology toward products and procedures for fixing clearly preventable diseases.  This is not to say that the former Vice President’s heart condition could have been ameliorated through early preventative measures.  Some people will still contract a disease in spite of preventative measures that could and would greatly reduce incidence and prevalence of that disease.

Nevertheless, a growing body of research – mostly ignored in the health care debate –  suggests that heart disease can be treated and even reversed through diet, exercise, and stress reduction (more about this below).  I am not a physician but as a policy person, I am raising questions about the lack of emphasis on the impact of human ecology and lifestyle in health care reform legislation.  The narrative fails to include much about underlying causes and alternative treatments for diseases.

Rather, the current health care cost narrative, replete with ageist metaphors and symbols (e.g. unplugging granny), is that the aging society (e.g. Baby Boomers) will “break the budget.”  The narrative ignores individual health as a trajectory that begins in childhood.  It has a beginning, middle, and end.  Unfortunately, focus on costs in the denouement, otherwise known as the “last year of life” (LYOL), ignores life-long development and costs.  Not much is expressed about increasingly poor diet, environmental toxins, smoking, lack of exercise, lack of access etc., etc., etc.  Furthermore, there doesn’t appear to be anything in the discussion about  power of industries to force policymakers to continue business as usual.

Over three decades ago, Arnold Relman, former editor of The New England Journal of Medicine identified the corporate health juggernaut as the “new ‘medical-industrial complex’” (NEJM, 1980;303: 963-70).  He warned that, “… it creates the problems of overuse and fragmentation of services, overemphasis on technology and ‘cream-skimming,’ and it may also exercise undue influence on National Health Policy.”  Nearly a quarter of a century later, John Greyman had the following to say in the Journal of the American Board of Family Medicine:  “Increasingly, Wall Street and the interests of shareholders have replaced Main Street in shaping the organization of health care, the market, and even clinical decisions” (JABFM, 2003; 16(5): 444-454).                                                             

Most Americans who have lived for a few decades have probably come to accept amazing high dollar advanced technologies as an inevitable and normal course of things in the progress of medical science.  But Ira Rutkow, surgeon and medical historian, in his recently published book Seeking the Cure:  A History of Medicine in America placed the matter in a broader perspective:

“Prior to World War II there had been little of this escalation.  Most of the early innovations – Morton’s discovering anesthesia, Lister’s sterilization procedure, Fitz’s defining appendicitis – had minimal material and research costs.  But the situation changed in the 1950s due largely to increased investments in science and the rise of the medical-industrial complex.  Medical treatments became more powerful and more expensive.  New biotechnologies like open-heart surgery, organ transplantation, and coronary heart stenting carried enormous price tags; even everyday diagnostic tools like CAT and MRI scans can cost thousands of dollars (page 305).”

As Dr. Rutkow, went on to say, “Health care gets better and better, but is affordable by fewer and fewer (page 305).”  Nevertheless, in the current discussion about health care, aging Baby Boomers are erroneously and fallaciously blamed for the coming fiscal crisis while the ole proverbial metaphorical gorilla in the room is ignored.  The gorilla everyone is ignoring in this discussion is advancing medical technology.  This is not the typical 800 pound gorilla; it is a 2000 pound gorilla in an ugly mood with a free market ideology.

In view of former Vice President Cheney’s recent heart surgery and implant, my earlier post regarding medical device charges was coincidental (“The Death of Senate Bill 2221 – A Bill to Clean Up Corruption and Market Manipulation in the Medical Device Industry,” posted July 13, 2010).  Medicare and Medicaid – the taxpayers – fund a large share of costly medical procedures.  In spite of that, the medical device industry is able to kill a bill that would provide the taxpayer fair negotiating rights.  This is only one of a large number of examples of an industry’s power to influence government policy for its members’ benefit but to the detriment of the public interest.

As heart disease and other chronic illnesses such as cirrhosis of the liver increase, transplantation, implantation, bioengineering, bionics, and so forth will be available for improving and prolonging life.  These procedures will not be concentrated in the elderly population.  In fact, life-prolonging, heroic measures become much less common as patients pass 80 years of age.  Furthermore, they will be so costly that the current out-of-control, pseudo-free-market health care system will collapse under its own weight.

 Because medical technology industries hide their data, it is hard to know exactly how much of the out of control health costs are due to increasingly sophisticated and expensive pharmaceuticals, devices, equipment, and procedures.  It is typically estimated be the cause of two-thirds of health care cost increases (P. Ginsberg, NEJM ,2004; 351 (16): 1591-1593).

My hypothesis is that aging per se accounts for very little of spiraling upward, out of control health care costs..  No doubt we are likely to consume more medical services as we age.  However, a large share of the very expensive medical care is consumed by patients below the age of 65.  But let’s concede that medical services are more likely to be consumed by patients over the age of 65 than patients under the age of 65.  Having recognized that we tend to suffer more maladies as we age, we still have to ask about justifiable costs and alternatives.

As mentioned above, a growing body of research suggests that the American diet, driven by agri-business, and corporate giants in food processing and fast food, plays a major role in chronic illnesses.  This research further inidicates that these diseases can be slowed and even reversed by dietary changes, exercise, and stress reduction (see e.g. T. Campbell 2006, The China Study; C. Esselstyn 2007, Prevent & Reverse Heart Disease; Ornish, et al. 1998, “Intensive Lifestyle Changes for Reversal of Coronary Heart Disease,” JAMA, 280(23), 2001-2007).

Although diet, combined with environmental toxins, is driving a large portion of chronic illnesses that, in their end stage, will, due to expensive technologies, be costly beyond the ability of society to pay for them.  This is not an aging problem.  It is a lifestyle problem that begins long before old age.

In the final analysis, the power of industries providing fixes for diseases caused by the food distributed  by other powerful industries will suppress discussion of lifestyle change as necessary for true health care reform (along with a single payer system covering all Americans). Because of this state of affairs, I am not optimistic about the success of the Affordable Care Act.  The operative word is “affordable.”

*Please note that I do not adhere to a strict format for citing references.  This is, after all, a blog.

HOMELESS WOMEN AND CHILDREN IN LAWRENCE

It is hot and humid tonight so I decided to take a walk on Mass Street at 9:15 PM.  It is a nice time to walk but it is not nice to see a mother and two babies homeless on a bench in the 900 block.  This is not the first time I have encountered mothers and babies on the street in Lawrence.

One has to ask what kind of government we have right now.  Obviously a government that will let babies live on the street.  The demeaning Temporary Aid to Needy Families – the name is even demeaning – is the handiwork of the Clinton era Democratic Leadership Council, which, along with the Republicans passed off punishment of the poor off as “welfare reform.”  As opposed to the old AFDC, TANF provides an extremely small amount of help to destitute families and provides it only for a limited time.

I have actually seen hungry children interviewed on a major news network.  On a Brian Williams anchored NBC evening news program, a correspondent asked some African American children what it felt like to go to be bed hungry.  These children answered the question with dignity and grace – much like the migrant children working as child labor I saw interviewed on a Dateline NBC program.

I laud the First Lady’s focus on childhood obesity.  But she and the President should be acting more like Eleanor and FDR right now.  What could be a greater priority than childhood hunger and homelessness?  The President and the First Lady are identified to much with inside the belt way elitists and not coming across as fighters for the poor and working classes. 

To the President and the Democrats credit, they have pushed for an extension of unemployment benefits over the opposition and filibustering of the mean-ass Republicans.  Republican oligarch flacks representing so-called Washington think tanks such as the Heritage Foundation and the Cato Institute have been all over talk shows pontificating about how helping the unemployed will make them lazy and shiftless.  That is exactly what the neo-cons said throughout the 1960s and 70s about public assistance for poor families.

WHAT’S HAPPENING TOMORROW: DON’T MISS THESE EVENTS

Sharon Lockhart & Alice Burdick:  “Every Woman” on KKFI at 3:00 PM (Saturday, July 17th)

Sharon and Alice will be discussing the big demonstration by progressive and just plain decent people against the anti-immigrant candidate for Kansas Secretary of State Kris Kobach and pal Sheriff Joe Arpaio, which took place out in Johnson County this week. They will also have some guests who have recently returned from assisting the people of Haiti.

Sharon Lockhart

2012 THE AWAKENING

A novel by Bill Douglas

You are invited to a catered book-signing at Edokko Japanese Restaurant, 8615 Hauser St, Lenexa, KS (Organized with Prospero’s Books)

Saturday, July 17th, 12 noon

Hear Sharon Lockhart’s interview with Bill at http://www.2012theawakening-thenovel.com/

If you like gripping adventure and a shift in consciousness coinciding with the end of the Mayan calendar in 2012, you will like this novel.  See what Deepak Chopra, Coleen Rowley (FBI whistle blower) and others have to say about Bill’s novel at http://www.2012theawakening-thenovel.com/

ANTI-SOCIAL SECURITY AND ANTI-MEDICARE IDEOLOGUES ON THE DEFICIT REDUCTION COMMISSION WANT TO CUT BENEFITS: ARE THE DEMOCRATS INEPT ENOUGH TO GO ALONG WITH IT?

Erskine Bowles from the pro-corporate branch of the Democratic Party (Democratic Leadership Council) and Alan Simpson, former reactionary Republican U.S. Senator, both appointed by President Obama to lead his euphemistically entitled National Commission on Fiscal Responsibility and Reform, are putting out signals that “responsibility and reform” will be placed squarely on the backs of the middle class and poor Americans. Here are a couple quotes from the former Clinton Chief of Staff Bowles that a correspondent of mine picked up from Reuters (Washington, July 14):

Bowles said he favors lowering corporate and individual income tax rates and putting in place a tax on consumption.”

“Both Simpson and Bowles made clear that cuts in defense spending, food stamps and other social programs as well as the Social Security retirement program and Medicare healthcare program for the elderly were under consideration.”

In their talk to the Chamber, Simpson and Bowels expressed their opposition to increasing the very low and ever decreasing taxes on the top wealth in this country.  Rather, they suggested that eliminating the mortgage interest deduction, widely favored by middle class home owners, would be a better alternative.

If President Obama and the Democrats in the House and Senate, by going along with the NCFRR, signal that the Democratic Party is still under the thumb of the pro-business, anti-working class DLC wing of the party, a huge chunk of the base will be furious.  The blowback will be so intense that President Obama will be insured a single term in office and the Democrats in the Senate and House will have a difficult time motivating the base in the 2012 election-year.

This is a big deal!  The Democrats had better understand what Social Security & Medicare mean to American voters.

THE DEATH OF SENATE BILL 2221 – A BILL TO CLEAN UP MARKET MANIPULATION AND CORRUPTION IN THE MEDICAL DEVICE INDUSTRY

Siemans Corporation - A Global Conglomerate in the Medical Device Field

In October of 20007 – almost three years ago – Senators Charles Grassley and Arlen Specter introduced Senate Bill 2221, otherwise known as the “Transparency in Medical Device Pricing Act of 2007.”  This bill simply requires medical device manufacturers to report the average and median prices of their products quarterly.  They don’t reveal this information now because they use a variety of financial incentives to induce physicians and hospitals to use their devices (since I don’t fully understand libel law, I won’t call these “financial incentives” bribes and kickbacks).

SB 2221 is bottled up in the Senate Finance Committee.  It was “stopped in its tracks,” which means it is pretty well dead.  You can bet that the so-called deficit reduction commission won’t show much interest in how this bill would prevent a major rip-off of health care consumers, the biggest of which is the U.S. Government. The commission’s mostly conservative members want to go after Social Security and Medicare benefits.

The problem boils down to this:  if an industry keeps secret and controls all pricing information, the negotiating powers of purchasers of the industry’s product are drastically reduced.  Furthermore, discounts and other goodies provided as incentives to use the product will not be accounted for in pricing.  Hospitals and physicians not willing to “play ball” will pay the full freight for the product because they will have no idea what their competitors are actually paying. 

Health care in this country is theoretically based on the “free market” concept, which should result in the best health care at the lowest price – this is the efficient market hypothesis. If an industry can manipulate and control prices, the free market is a joke.  This type of situation is all too common in the “Rube Goldberg” nature of the current U.S. health care system.  The “free market,” as it is practiced in health care, is actually driving up prices.

How does pricing practices in the medical device industry drive up prices?  Actually, a bulletin issued by King & Spalding, a high-powered lobbying firm for the medical device industry, explains it very well:

“Increased transparency of device pricing might especially impact the hospital’s purchasing costs of ‘high sticker price’ implants, allowing the hospital to reduce the publicly posted price charged for specific services and procedures that utilize the device and still maintain a favorable operating margin for that service.  In this context, where the hospital’s own pricing will be in the spotlight, hospital administrators will look closely at all opportunities to drive down purchasing costs and to negotiate purchasing prices based on market-based pricing information” (Client Alert, dated December 4, 2007, page 2).

This King & Spalding bulletin warned its clients that “Pending legislation proposes a federal price reporting requirement on implantable medical devices that could prove to be extremely complicated and costly to device manufacturers” (page 1).  The bulletin also stated that “Hospitals have reported to Senator Specter that implantable devices … represent close to 40% of their expenditures” (page 2).

The Tallgrass Activist will continue to blog about health care technology.  Medical advances are a wonderful thing but they pose a far bigger problem for health care financing than a moderate shift in the demographics of age.  The impact of a change in the proportion of the 65+ population from 13% to 20% of the total U.S. population is quite manageable.  However, the medical device industry is massive, powerful, profitable, and quite attractive to investors.  The website BNET reported that none of the top 30 medical device manufacturers had less than $1.5 billion in revenues in 2006*.  You can find a list of the behemoths in this industry at Espicom, a business intelligence website**.

It is not surprising that a powerful industry can kill a bill by pressuring a committee to pigeon hole it.  But it is hypocritical of Congress to claim that decent health care for all Americans is unaffordable while they allow deceptive pricing practice that inhibit control of health care costs.

Pacemaker

*http://findarticles.com/p/articles/mi_hb6159/is_6_5/ai_n29366501/pg_2/?tag=content;col1

**https://www.espicom.com/prodcat2.nsf/Product_ID_Lookup/00003469?OpenDocument