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US: Private Health Insurers Ripping Off The Public

Private Health Insurers Ripping Off The Public, Prominent Health Care System Critic Says

A Massachusetts School of Law Interview
By Dean Lawrence Velvel , Host

A prominent medical authority charged the U.S. health care delivery system is "outrageously expensive, far more expensive than any system in the world" and Americans aren't getting their money's worth.

"We spend at least twice as much per capita on health care as most countries and vital health statistics show, on average, Americans don't live as long as do the citizens of many other countries," said Dr. Arnold Relman, past Emeritus Editor-in-Chief of The New England Journal of Medicine and a former Chief of Medicine at The Hospital of the University of Pennsylvania, Philadelphia.

"Vital health statistics show we're in the middle of the pack or below" most advanced countries, Dr. Relman said. "Our infant mortality rate is greater despite the fact statistics show we are spending so much money." About 50 million people in the U.S. are without any medical insurance at all, he said, and "at least an equal number do not have enough health insurance all the time and have financial disaster if they become seriously ill."

Dr. Relman said that Canada delivers equal technology to patients and provides the same drugs as the U.S., yet the U.S. "medical-industrial complex" spends "almost twice as much as Canada spends." (Canada is ranked 11th internationally in life expectancy at 80.7 years while the U.S. is ranked 38th, at 78.2 years. Japan is ranked first at 82.6 years.)

Only in the U.S., Dr. Relman said, is health care and insurance in health care treated as a business: "We are alone in the extent to which health care has become an investor-owned enterprise."

In an hour-long interview for "Books of Our Time," broadcast nationally via Comcast, Relman told host Dean Lawrence Velvel of sponsoring Massachusetts School of Law: "Health care providers in the U.S. are inefficient. For-profit insurance plans take out of the premiums we pay them on average 20 percent and some as much as 30 percent of the premium for their own profit and for their own business and for their own overhead before they pay any money to health care providers, the doctors and the hospitals."

"And as far as anyone can see, there is nothing of comparable value that we get (for what) they take away. We're paying hundreds of billions of dollars in overhead costs to a class of private insurers," said Dr. Relman, author of "A Second Opinion: Rescuing America's Health Care"(Perseus Books Group). He added, "We have to find some fair and practical way to ease private insurance companies out of the health care business."

(According to the Congressional Research Report to Congress of last September 17th, a comparison of 30 members of the Organization of Economic Co-operation and Development showed in 2004 the U.S. spent $6,102 per capita on health care, more than double the OECD average and nearly 20% more than No. 2-ranked Luxembourg. The report said in 2004, 15.3% of the U.S. economy was devoted to health care compared with 8.9% for the average OECD nation.)

Dr. Relman pointed out that Medicare operates with "an overhead cost of 3% of the money spent as compared to 15% to 25% overhead for private insurance. Total premiums are edging close to $1 trillion dollars, roughly $800 billion," he said, "and take 20% of that and you've got $160 billion and that's not counting the overhead they impose on the providers."

He called for consolidating all the money being paid into medical insurance into a single-payer system run by one government agency. "There should be no bills," Dr. Relman said. He warned, however, "Even a single-payer system is not affordable as long as the health care delivery system is unorganized. Medicare is going broke. The cost of Medicare is going up at approximately 10% a year."

He went on to say that "Medical care in the U.S. at its best is the equal or better than any medical care anywhere. But excellent medical care is not uniformly available. And if you don't have insurance you may not get the medical care you need. It's a very unfair and inequitable system." Emergency room care, which is often sought as a last resort by the poor that lack insurance for preventive care, "is just what it says, emergency care," Dr. Relman reminded, "It's not quality care, ongoing and continuous."

At the same time, Dr. Relman said, "I've seen some terrible medical care provided to rich people because they didn't know where to go for the best service. Successful doctors---doctors who take care of the wealthy are not necessarily the best doctors."

Dr. Relman pointed out there is "no price competition" in the health care industry but "there is competition to get patients." He said, "Non-profit institutions are struggling to stay alive and they have to act as their for-profit competition to advertise, to market themselves on services they can make a profit on but they do not advertise services that may be needed on which they make no profit."

The medical authority said apologists for the comparatively low life expectancy of Americans given the money expended like to claim it is because Americans have a "frenetic" life style. Other developed countries, though, also have their share of smokers, obese citizens, and frantic lifestyle yet they live longer than Americans. Those who make such apologies, Dr. Relman said, "are people who are usually benefitting from the system."

"The Hippocratic Oath that doctors will put the interests of their patients ahead of their own interests is belied by the realities of the new medical marketplace that has come into being," Dr. Relman said.

The Massachusetts School of Law at Andover is a non-profit institution dedicated to providing a quality, affordable legal education to students from minority, immigrant, and low-income backgrounds. "Books of Our Times" has won more than 200 awards for broadcast excellence since it was launched 12 years ago.


(MSLAW videos are available from Google Video. For more information visit To reach Dean Lawrence Velvel, please contact Jeff Demers at Massachusetts School of Law, Andover, at (978) 681-0800. Or contact Sherwood Ross Associates, Suite 403, 102 S.W. 6th Avenue, Miami, FL 33130 (305) 205-8281)

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