Transcript for the Piece Audio version of Why Single Payer, Part 2: A big slice of the healthcare pie - Insurance and Pharmaceutical Companies

TRANSCRIPT

MILES
Historically, people have received health insurance through employee benefits. But as the cost of insurance continues to grow, businesses are dropping this benefit in order to remain completive in a world market. Additionally, hospitals and clinics rely on patients with health insurance to offset their cost from other loses. I'm Miles Eddy, we continue our conversation with Dr. Rocky White, who spoke with business owners at the Alamosa Rotary Club, Russ Johnson, CEO of the Alamosa Hospital, and Dr. Beth Kinney, an Emergency Room doctor.

Dr. White.

DR WHITE
It takes anywhere between 12% and 15% overhead to run an insurance company. That's a not-for-profit insurance company. If you take an organization like Signa, or Anthem Blue Cross, or United Healthcare, who's paying CEO salaries of sever or eight million dollars a years with 20 and 30 and 40 millions dollars worth of stock options, and they also have to make 6% or 7% interest on their money for their share holders, you start driving up the bureaucracy and the profit taking in the insurance industry sometimes as high as 25%. What that means to you as businessman and businesswoman is that somewhere between 1 in 5 and 1 in 4 dollars that you spend on health insurance premiums are spent simply in bureaucracy and profit taking in the insurance industry!

MILES
You said your profit comes from getting paid from the insurance companies.

RUSS JOHNSON
Our second largest department is the business office. The reason is that there is so much differentiate amongst how do you file a clam, what's allowed, what's a covered service, what's not a covered service, what's a required field of information, and it really does get that ridiculous. You'll have a clam sent back because the middle initial is missing. We sometimes feel like that turns into some gamesmanship; that it is in the best interest of insurance to hold their money and delay payment if they can.

DR KINNEY
I see people everyday who have basically lost their job because their sick. Well in this country, when you loss your job the first thing you loss is your health insurance, which is what you need when you're sick. I mean the system is just backwards. Tying employment and health insurance together makes no sense and it's not done in any other country except this one.

RUSS JOHNSON
If you look at who is profitable in healthcare these days, it's not hospitals, it's not doctors; the two most profitable lines of business in healthcare are pharmaceuticals and insurance.

DR WHITE
Do you realize that General Motors spends five billion dollars a year on healthcare benefits for their employees and for their retired employees? GM calculated that it costs about $1,500 an automobile for their healthcare benefits.

RUSS JOHNSON
And I think the insurance industry last quarter announced some fairly incredible profit margins, which for providers is a little hard to take because we're the ones providing the care and struggling to manage charity services, and you know, frankly their pushing paper around.

DR WHITE
The pharmaceutical industry: They sit at the top of the fortune 500 in terms of profits. The average return on investment for the fortune 500 companies is somewhere around 7%, 8% a year. In the pharmaceutical industry it ranges between 12% and 15%. I get a newsletter every week from the American Medical Association. In my last newsletter, there were 37 pages in that news letter, 28 of the 37 pages where full page color slicky ads from the pharmaceutical industry. So you know who's buttering the bread of the American Medical Association. As a result, you can imagine what their stand is.

MILES
You have been listening to Dr. Rocky White, Mr. Russ Johnson, and Dr. Beth Kenney. We continue next time talking about cash flow in our healthcare system.

Reporting from Alamosa, Colorado, and produced in the studios of Midi Age Productions, I'm Miles Eddy.