For-Profit Hospital Lobby Wants to Cover the Uninsured

Just weeks after conservative columnist Jay Ambrose lambasted John Edwards’ health care plan, the Federation of American Hospitals introduces Health Coverage Passport, a program similar in scope to the Democratic Presidential hopeful. The FAH initiative specifically deals with Republican and Independent voter concerns in its construction.

In the C-SPAN2 televised kickoff, a pollster revealed startling information about U.S. citizen’s health care concerns. Americans have been concerned, even increasingly so about losing health insurance benefits since 2002. It is their top financial concern, rising from 20% of respondents to 32% from 2002 to 2006. Who failed to respond to this need of the people? President Bush and Republican controlled Congress sat on their hands as 6 million Americans lost health insurance.

Now that it is politically expedient, conservatives are open to reducing the legions of uninsureds in America. While I might rue their past indifference, I welcome open and honest strategizing on how to accomplish greater coverage levels. This leads me to aspects of the Federation’s proposals and what the for-profit hospital lobby hopes to accomplish. This is especially important as two large chains, HCA & Triad Hospitals are going private courtesy of overflowing coffers of big investment houses.

The FAH plan requires all legal citizens to purchase health care. This shows the conservative voter their plan won’t finance high quality health care for illegal immigrants. It compassionately provides increased funds for emergency care for such folks. However, as 20% of the uninsured are estimated to be illegal immigrants, over 9 million people will remain uninsured.

The for-profit lobby projects only 6.6 million will be without coverage after implementing their plan. Where do these good conservatives get this figure? Other groups like the Rand Corporation and the Center for Immigration Studies peg the illegal immigrant contribution much higher than 20% of America’s uncovered. Did these groups artificially inflate their numbers to reduce the political will to address the uninsured from 2002 until now?

The other unique piece of the FAH plan is keeping the major role of employers in providing insurance. The President and Ron Wyden’s plans grease the skids for employers to dump this responsibility on the employee via tax credits or increased income for a short time. For-profit hospitals want stability in health insurance coverage. They see employers as better able to provide that solid foundation than unions or individuals.

Just as President Bush proposed with his tax credits, the Federation’s plan gives tax benefits for people already covered (some quite well off). Some 61 million people would get a deduction to pay the employee’s share of their health insurance benefit at work. Some 26 million not given an option by their employer would need to purchase their own insurance. In the process of addressing 47 million without insurance, tax benefits will accrue to 87 million people. They also grant a tax decution for people making above 350 to 400% of the federal poverty level.

So who benefits from the Republican dominated Federation of American Hospitals plan? Obviously, their for-profit hospital constituents win as more patients have a payor source. In 2005 hospital uncompensated care stood at roughly $29 billion. Providers have born the burden of the increasing legions of uninsureds in our country, although FAH facilities traditionally carry less of this load. Safety net facilities are most often nonprofit community or governmental hospitals.

A second group benefiting is America’s already booming insurance industry. Embedded in the plan is privatization of Medicaid such that 2/3 of the much larger program is provided by the private sector. Add the 31 million in private Medicaid to the 29 million number of newly non-Medicaid covered and private industry stands to pick up 60 million new policies or covered lives.

Who benefits from more or better paying business at for-profit hospitals and insurance companies? Private equity firms will make out like bandits. On the provider side KKR’s HCA and Goldman Sach’s Triad Hospitals could be spun off for a handsome profit in a few years if such changes happen. On the insurance side The Carlyle Group’s MultiPlan and politically connected WellPoint should do quite well.

Who benefits from a return on their investments in private equity firms? The rich, super rich and ultra rich do. That they also get a tax deduction on their health insurance under the Federation’s plan is just one more bonus…