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AHIP Hooray!

By Jacob Bor, Heather Lanthorn, and John Quattroch

If you were anywhere near Harvard Business School last Saturday you might have seen a 12-foot tall puppet dancing to accordion music while a merry band of “Congresspeople” and “health insurance executives” swilled champagne, showered each other in cash and sang round after round of “For She’s A Jolly Good Fellow.” If you weren’t near HBS, you missed a fantastic party. Here’s what happened:

Karen Ignagni, CEO of America's Health Insurance Plans, was greeted by this band of Occupy Harvard and Occupy Boston at the 9th Annual Healthcare Conference at HBS, where she was the keynote speaker. The merry band feted the insurance industry's lobbyist-in-chief with an impromptu gala, honoring Ms. Ignagni with an award for "Excellence in the Business of Denying People Medical Care." The revelers welcomed conference goers with cheers of "A-HIP-Hooray" and explained why Ms. Ignagni had been chosen for this ignominious award.

The award read: “Be it hereby known that Karen Ignagni has successfully upheld the interests of private insurance in the face of efforts to reduce the costs of administrative waste and to insure all Americans, preserving company rights to profit before the public’s right to health.”

Nearby, a comatose patient lay under a sign declaring "45,000 deaths per year due to lack of insurance", citing a well-publicized study by Harvard Medical School.

The 12-foot tall puppet was allowed to pay to register for the conference but barred from entering any of the conference buildings; poignantly illustrating that corporate medicine will gladly take the money of those not invited to the table. Unperturbed, the outdoor gala-goers still had plenty to say. "We want to thank AHIP and the insurance industry for making us all filthy rich," said one protester dressed as Max Baucus, the senior US senator from Montana.

More seriously, another protestor noted that, “the target here is not just the insurance industry, but the wholesale corruption of our government by corporate interests.” He told conference-goers, "when the health care industry spends half a billion dollars each year lobbying Congress, it's difficult to achieve meaningful health reform that prioritizes the health of the public."

It’s fitting that Ignagni was the keynote speaker at a conference titled “The Future of Healthcare: Innovative Business Models.” The current business model in healthcare legislation goes something like this: Large corporations spend hundreds of millions of dollars on lobbyists and contribute millions more directly to politicians on both sides of the aisle. Politicians then allow private health insurers to profit tremendously from a system that provides neither adequate coverage nor adequate care and has failed utterly to contain costs.

AHIP's success in this model is exemplary. Health insurance and drug companies donated $26.2 million to the 111th Congress. Politicians receiving the largest campaign contributions from health insurers were Barack Obama, John McCain, John Kerry, Max Baucus, Eric Cantor and John Boehner. After a vigorous ($86 million) campaign against health reform, health insurers not only defeated the public option but also got a bill that will compel all Americans to purchase private insurance. Critics may call AHIP two-faced, but we believe that its goals are clear: promoting the profitability of the health insurance industry.

Since Obamacare (the Affordable Care Act) passed into law, health insurers have seen record profits, raising premiums well above inflation. Last year the profits from the five largest insurers, UnitedHealth, WellPoint, Aetna, Humana and Cigna totaled $12.6 billion. That’s enough money to increase the number of low-income children receiving healthcare by 6.45 million. As working families and employers struggle to pay rising premiums, insurance CEOs rake in salaries of $10-20 million a year, which is 300 to 600 times greater than the median personal income in the U.S.

Obamacare will expand coverage to many of the over 40 million Americans without health insurance. Still, health insurance often fails to provide adequate coverage. Twenty-five million Americans are underinsured. In 2007, medical bills contributed to 62% of all personal bankruptcies. And 69% of those experiencing medical bankruptcy actually had health insurance at the time they got sick or injured—just not enough.

For health care, the US pays more and gets less on key outcomes, such as health status (life expectancy) and financial risk protection (not being bankrupted by out-of-pocket medical expenses). The U.S. spends $7,500 per person on healthcare each year, twice as much as other rich nations spend, including Japan ($2,700), Spain ($2,900), Sweden ($3,500) and France ($3,700). And yet U.S. life expectancy is 78.2 years, while Japan’s is 83.0, Spain’s is 81.8, Sweden’s is 81.4 and France’s is 81.0.

Happily, there are plans that could truly reform our health system. One promising fix for our health system is to consolidate to single-payer insurance, a system in which a single public or quasi-public agency organizes health financing, but delivery of care remains largely private. With one payer, the US could save enough on administrative costs (more than $350 billion annually) to cover all of the uninsured.  Patients would regain free choice of doctor and hospital, and doctors would regain autonomy over patient care.

Of course, there’s nothing that private health insurers and their lobbyists will fight harder against. After all, although a single-payer healthcare system would save American lives, it would hurt the profitability of the health insurance industry.  The industry will continue to fight so that the champagne will keep flowing, the money will keep showering down, and the accordion will keep playing.

Jacob Bor is an ScD candidate in Global Health & Population at the Harvard School of Public Health. Heather Lanthorn is an ScD candidate in Global Health & Population at the Harvard School of Public Health. John Quattroch is an ScD candidate in Global Health & Population at the Harvard School of Public Health.

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