Why populists like Bernie Sanders fool themselves when they promise to change the way America works
THE LAST WORD | Andrew M. Mwenda | As the 2020 Democratic Party presidential primaries in the USA gather momentum, candidates have made healthcare a central issue in their elect-ability. Bernie Sanders and Elizabeth Warren have made it their swansong.
For a person like me from a very poor country, even with my strong pro free market views, I wonder why America cannot have universal medical insurance for its citizens, or find a safety net for its poorer citizens. America teaches us that democracy can easily be manipulated by the powerful to benefit them rather than deal with the concerns of the vulnerable.
I have just finished reading a nice book by David Pilling, an associate editor at The Financial Times, titled The Growth Delusion: Wealth, Poverty and the Wellbeing of Nations. It is a long critique of the use of the Gross Domestic Product (GDP) as a measure of wellbeing.
The book is a good read, although at the end of it all, Pilling failed to convince me that GDP is not the best (among all other alternatives so far developed and which he explains in the book) proxy for the measurement of wellbeing. But that is a subject for another day. For now, our interest is in the politics of healthcare in USA.
In the summer of 2012, Pilling tells us, a one Janice S, a 64-year-old former sales assistant living in Connecticut, felt pains in her chest. An ambulance drove her four miles (six kilometers) to a hospital where she underwent a series of medical tests and had “a fleeting encounter” with a doctor. She was eventually told she had no major medical problem; that she only suffered indigestion. She was sent home. But she paid $995 for the cost of the ambulance, $3,000 for doctors and $17,000 for the hospital – a total of $21,000.
What caused such a huge cost? One of the things she paid for were three “troponin 1” tests each of which cost $199.50. If Janice had been one year older i.e. 65 years, she would have qualified for Medicare, the US government insurance scheme. Here, the cost of a troponin test would have been $13.94 each. She was also charged $157.61 for a complete blood count test. Yet if she had Medicare the US government would have reimbursed the hospital $11.02. The problem with Janice was that she was out of work in a country where health insurance is tied to your job.
The absurdity of the US healthcare system is reflected in the fact that hospitals and doctors make huge markups when dealing with the uninsured. For instance, to continue with Janice’s story, she was (in some tests) charged 10,000% above what would otherwise have been charged if it were under Medicare. According to filings by Stamford Hospital, which treated Janice, its total expenses on laboratory work like they did on her over one year were $27.5m while the total charges were $293.2m. And Stamford is a nonprofit hospital.
What we are seeing here is that to be unemployed and uninsured in America and at the same time be under 65 years is a death sentence. Janice’s story is mild. My Canadian friend got a sprain on his shoulder while playing golf in Miami. He was visiting and therefore uninsured in America. Within three weeks his medical bill had reached $500,000. His insurance company in Canada, to cut its costs, sent an air ambulance to evacuate him.
Yet it would be wrong to imagine that America, being this stingy to her unemployed poor citizens, spends less on medical care for her citizens. On the contrary, the USA spends the highest amount of money on healthcare than any other country in her comparison group i.e. among rich advanced nations. In 2017, America spent 17% of GDP on healthcare, up from 13% in 1996.
For instance, the United Kingdom spends 9% of her GPD on healthcare, Japan 10.2%, France (which has one of the best healthcare systems in the world) 10.5% and Singapore, also with a highly robust healthcare system, spends 4.9%. One would easily think that Americans get better health from this spending but they don’t. If we use life expectancy at birth as a proxy for good health, America is number 31, at the same rank as Costa Rica, with 12% of her per capita income. Its average life expectancy of 79.3 years is lower than that of Japan at 83.7 years. And when it comes to infant mortality, America is 57th in the world, just behind Bosnia.
Of course there are many reasons that explain this variance. Americans eat junk food, have higher levels of income inequality, have social problems such as high levels of drug abuse and have higher levels of violence hence die in shootings and car accidents. But this does not address the fact that the US gets less return on her healthcare investment. What is really happening is the power of the healthcare industry such as associations for doctors, pharmaceutical companies, hospitals and insurance.
The healthcare industry’s formidable lobbying machine ensures that laws in Washington DC are made with the interests of its clients at heart. In fact the healthcare industry spends more money lobbying in America than the oil, arms and banking industries combined. And this is the crux of the American political system. Voters do not make the critical decisions. Rather lobbyists do. It is this reality that makes the promises of Sanders and Warren hot air. Presidents in America do not pass laws. Congress does. And both the House of Congress and Senate are in the pockets of lobbyists.
What makes policy in Washington are relationships. Companies and interest groups have learnt that despite the high costs of hiring lobbyists, the ability to shape or tweak or even kill the tiniest legislative loophole can be worth millions of dollars. In his book So Much Damn Money: The Triumph of Lobbying and the Corrosion of American Government, Bob Kaiser, a former managing editor of the Washington Post, has described very well how lobbyists are usurping power from the people.
How do lobbyists work? Often, they are former senators and members of the house, who have accumulated long résumés of connections with their sitting colleagues. Today, nearly every major corporation and interest group employs a lobbyist. As I write this article, over 412 former congressmen and women are working for lobby firms in DC, according to the Center for Responsive Politics, and 305 are registered as federal lobbyists. This is legalized corruption.