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Man, Money, and Union Medicine: A Time Op-Ed

By Ralph DiLibero, MD 

Drawing by 7-year-old girl: Non-patient-centered “value-based” system of care.

When man intentionally enacts a good economic deed that ultimately results in an unintentional economic punishment, then his initial cathexis is usually overly concerned with short term economic gain that sacrifices long term economic stability:

Union interest in compulsory national health insurance was strong in 1918, but the many proposals by the American Association for Labor Legislation (AALL) were all defeated.

After World War II, with wages frozen for American workers (which inhibited business competition for union workers), unencumbered non-monetary incentives were popularized.  The Labor-Management Relations Act (1947 Taft-Hartley) assured union workers health benefits as well as other benefits such as pensions. The cost of a benefit-based health insurance was deductible from the taxes paid by their employers.  The intentions of the government were good. However, the political consequences of these above-stated actions unintentionally bound unionism’s free will regarding healthcare benefit distribution with a Gordian knot to the economic and political interests of private sector corporate firms, including the corporate healthcare insurance industry.  Until the time of President Donald Trump, union workers paradoxically voted the Democratic ticket and assured Democratic party victory in closely contested elections; while at the same time unions universally opposed Democratic and Republican party proposals for single payer or universal coverage health insurance, such as President Nixon’s CHIP (1973), President Clinton’s “health security” universal coverage (1993), and President Obama’s Common Plan (2009).

In 1949, President Harry Truman became the first U.S. President to place a proposal for a national health plan on the floor of Congress.  It was a single payer system to include all of American Society.  The concept was denounced by private sector industry-aligned unions and the AMA. President Truman commented, “I’ve had some disappointments as President, but the one that has troubled me, in a personal way, has been the failure to defeat organized opposition to a national compulsory health insurance system.

(The medical profession and the AMA never considered an unanticipated consequence in rejecting an early alignment with the public sector – that the private sector of insurance firms would someday evolve to be so autonomous that financial considerations regarding the medical profession would fall to the very bottom of a to-do list necessary to run THEIR healthcare delivery systems.)

Senator Bill Bradly lost union support in his bid to become the Democratic candidate in 1999 because his platform favored universal single-payer health insurance. The same might be said about Governor Jerry Brown’s bid for the Democratic presidential ticket; for as the governor stated in 1972, “I see a model, cut out all the private health insurance, you have one single payer at the national level for all the 50 states; that one single payer will be the one that negotiates with the doctors, the hospitals, and the other providers.”

It seemed that the unions were physically and mentally incapable of raising a sword to slice that Gordian knot; they were hopelessly bound to private sector corporate business interests.  The Employment Retirement Income Security Act (ERISA 1974) assured union pension standards and allowed employers the ability to create individual insurance plans. There were to be unanticipated consequences.

Unions, unfortunately, chose to follow the private sector rather than lead, afraid to venture out from a seemingly secure stepping stone that was actually anchored in corporate quicksand.   As a result, unions found that they were not sitting at the bargaining table for a health insurance policy and might instead be on the menu for the lunch. Rather than defined or fixed benefits, employers moved to offer union members fixed cost coverage health insurance plans at a time when health insurance premiums were on the rise and union wages were stabilized.  When private sector employee health insurance plans finally switched from defined benefit to defined contribution, employers then enjoyed a flexible policy with no guaranteed promise of future coverage.  Dollar amount guaranteed pensions also shifted to defined contribution plans such as 401K plans, which put the onus on the union worker to bear the risks and consequences of a loss in the stock market as occurred in 2008. 

Only after successfully transferring increasing healthcare costs onto employees did this private sector defined contribution-based health insurance ultimately revealed itself to be an accomplished Faustian deal.  Moreover, undefined increasing healthcare costs bore the blame for the downsizing.  Unions were fed and feasted on this excuse of pure political propaganda perpetuated through a media carefully fit with horse-head blinders issued by private sector business corporations.  This false perception stagnated then strangled any competitive union advantage before it could be developed.

These events suddenly evoked the ire of many union members, but Alexander the Great’s sword was not yet in sight as political activism for single payer healthcare silently and insidiously grew.  Finally, business corporation downsizing combined with greater productive expectations from union workers significantly increased union appreciation and awareness of their vulnerable situation regarding healthcare coverage.

Pharma and commercial health insurance corporations, via lobbyists and political contributions, had been able to convert congressional interests to favor corporate interests. Employers then negotiated, determined, and directed the institutional policies of healthcare delivery organizations and exerted economic control over doctors’ incomes.  The accelerated demise of former private practice doctor involvement in healthcare delivery thus allowed the corporate insurance industry to infiltrate and ultimately control state and local medical societies and eventually the AMA. 

Over the next ten years, the U.S. debt will increase; with third-party insurance, the debt will increase to 49 Trillion Dollars, while with universal single-payer insurance, the national debt will increase to 32 Trillion Dollars.

Single payer national health insurance is a funding mechanism only.  It does not define a delivery mechanism, category of service requirements, or provider types.  The scope, amount, and duration of healthcare insurance benefits would need to be determined on a national basis. Middle-men insurance corporations now make up a patchwork system of for-profit and not-for profit-players with total administrative costs equaling 31% of total health costs, amounting to $400,000,000,000.00.  The financing of national single-payer insurance eliminates those middle-man profits now going to insurance corporations and utilizes those funds to cover an increasing array of healthcare delivery benefits.  Statistical sharing reveals that national single payer is more secure in producing a healthier population with greater buy-in by all.  With guaranteed health insurance awarded to all, there is also greater peace of mind.  Single payer health insurance waves good-bye to political lobbyists representing Pharma and insurance corporations and thus decreases the flow of funds to politician’s campaign chests.

Private sector insurance corporations have sought to maximize productivity and profits by depersonalizing and almost erasing the doctor-patient relationship. With remorse for so many missed past opportunities to take political command of healthcare coverage and non-patient-centered systems of care, unions began to contribute funds and undertake active political action to back local state candidates that favored universal single-payer coverage.  This movement was obviously opposed by a well-organized healthcare insurance industry that feared losing its middle-man profits to improved single payer benefit packages for union workers under such a government-run universal single payer plan. 

2017 witnessed the emergence of that infamous ancient Greek sword once manipulated by Alexander: On January 24, 2017, Representative John Conyers introduced H.R. 676, a national single-payer initiative known as the Medicare for All Act.  The bill is still growing in popularity and now has over 118 co-sponsors, including former California insurance commissioner and lieutenant governor, U.S. Congressman John Garamendi.

In 2019, unions will need to face the consequences resulting from the double-faced Janus decision that was determined by SCOTUS.  Unions represent 10% of the private sector workforce, but one-third of all government employees are unionized.  The 2018 California gubernatorial race elected Gavin Newsome with a platform for universal single-payer health insurance that was endorsed by former Governor Jerry Brown.  An ever-increasing number of unions and union workers are supporting this effort.  2019 should prove to be an interesting election year. 

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