Friday, February 27, 2009

Obama Begins to Nationalize Healthcare: Wall Street Shocked, Shocked!


Now is the time to jumpstart job creation, re-start lending, and invest in areas like energy, health care, and education that will grow our economy, even as we make hard choices to bring our deficit down. That is what my economic agenda is designed to do, and that’s what I’d like to talk to you about tonight.


—President Barack Obama’s Address to a Joint Session of Congress, February 24, 2009


So began our President this past Tuesday night in a televised speech that apparently did not make it into the cable boxes of most healthcare investors, to judge by the reaction yesterday when details of that budget hit Wall Street.

Granted, it might have been that anybody who actually paid attention to what the President said were so stunned by the whopper near the top of the speech, when the President disclosed he would rely on Vice President Joe Biden to oversee the $787 billion stimulus plan, that they missed the healthcare discussion later on:

That is why I have asked Vice President Biden to lead a tough, unprecedented oversight effort – because nobody messes with Joe.

Now, Joe Biden has never been mistaken for Dick Cheney, or even Mickey Rourke, for that matter, as far as “messing with” goes.

Elected to the U.S. Senate four years out of law school, Biden hung his hat there for the next 35 years until, serendipitously, one of his various unsuccessful runs for President landed him on the Obama ticket, thanks to that distinguished Senator-like hair and those foreign relation credentials touted by Biden aids tired of hanging out in the Senate for three decades with nothing to show for it but big offices.

Contrary to the President’s remark, Biden has indeed been severely “messed with” during his career, most notably by Hillary Clinton and Obama himself during the recent Democratic primary campaign. Even after he made the ticket, Obama’s own staff” “messed with Joe,” keeping him and his weird, eliptical meanderings as far from television cameras and microphones as possible during the final days of the election.

Consequently, the President’s flight of fancy—that a 35-year Senate veteran and failed Presidential candidate with no actual working experience would effectively oversee a $787 billion spending package so that “not a dollar is wasted”—might have caused investors to miss an even bigger hint at what was coming down the pike, when the President discussed the bank bailout proposals:

I understand that on any given day, Wall Street may be more comforted by an approach that gives banks bailouts with no strings attached, and that holds nobody accountable for their reckless decisions.

This in-your-face throwing down of the gauntlet to Wall Street might have given investors a further clue that Obama was not necessarily aiming to be their best friend.

But if they did not pick up on it then, they certainly ought to have when the President pulled no punches discussing his healthcare plans:

For that same reason, we must also address the crushing cost of health care.

This is a cost that now causes a bankruptcy in America every thirty seconds. By the end of the year, it could cause 1.5 million Americans to lose their homes. In the last eight years, premiums have grown four times faster than wages. And in each of these years, one million more Americans have lost their health insurance. It is one of the major reasons why small businesses close their doors and corporations ship jobs overseas. And it’s one of the largest and fastest-growing parts of our budget.

Given these facts, we can no longer afford to put health care reform on hold.

Does this sound like a man on the side of fat-margined biotech companies and paper-shuffling HMOs?

Still, for some strange reason, Wall Street was shocked—shocked!—by the details in yesterday’s budget.

It seems that in order to provide more comprehensive coverage for Americans who can’t afford it, the budget looks to cut costs out of one of the most profitable industries on the planet.

Yesterday, investors read the fine print and reacted.

But they can’t say they weren’t warned.



Jeff Matthews
I Am Not Making This Up


© 2008 NotMakingThisUp, LLC

The content contained in this blog represents the opinions of Mr. Matthews.
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9 comments:

Anonymous said...

Jeff, the nationalization of healthcare is one of the most divisive issues out there, and you will surely get plenty of comments on this entry that are not worth posting (or that can't be).

While I disagree with nationalization in principle, the current system is broken enough where I'm indifferent to how the US proceeds.

However, I have to take issue with the comment "It seems that in order to provide more comprehensive coverage for Americans who can’t afford it, the budget looks to cut costs out of one of the most profitable industries on the planet."

The budget does not look to do anything of the sort. Spending money on computerized medical records nips around the edges, but at the end of the day nothing in the budget will meaningfully reduce healthcare costs.

Reimportation of pharmaceuticals is unlikely to happen (PhRMA has many friends on the hill): even if reimportation somehow makes it through, pharmaceutical companies can and will take action to severely limit the practice.

The only difference under the budget is who the payer will be. I have not seen any informed analysis that supports the popular idea that administration costs would be materially reduced via nationalization. Just look at Canada, the UK or our own VA for examples of significant ongoing admin costs under public healthcare systems.

Kid Dynamite said...

weren't the Democrats bragging about how Biden was the least (or one of the least) wealthy senators - with a net worth of under $100k?

I hated this marketing point - that a man paid well over $150k a year was unable to save any of his earnings.

This demonstrated lack of competence with regard to finance is what should scare people about Biden overseeing the $780B spending plan.

dearieme said...

My wife has several French friends who have each lived in England for two decades or longer. They are all strong Anglophiles. So it is with some confidence that I can advise you - make sure that whatever you get is a lot more like the Frnch National Health Service than the British one.

Anonymous said...

Health insurance companies play a major role in our current healthcare crisis. These companies make huge profits and their CEOs make millions, while the rest of us face skyrocketing healthcare costs, impossible bureaucracy, and life-diminishing insurance denials.

HEALTH INSURANCE COMPANY PROFITS IN 2007:

1. UnitedHealth Group -- $ 4.654 BILLION. UnitedHealth Group owns Oxford, PacifiCare, IBA, AmeriChoice, Evercare, Ovations, MAMSI and Ingenix, a healthcare data company

2. WellPoint -- $ 3.345 BILLION. Wellpoint owns BLUES across the US, including Anthem Blue Cross Blue Shield, Blue Cross Blue Shield of Georgia, Blue Cross Blue Shield of Wisconsin, Empire HealthChoice Assurance, Healthy Alliance, and many others

3. Aetna Inc. -- $ 1.831 BILLION

4. CIGNA Corp -- $ 1.115 BILLION

5. Humana Inc. -- $ 834 million

6. Coventry Health Care -- $626 million. Coventry owns Altius, Carelink, Group Health Plan, HealthAmerica, OmniCare, WellPath, others

7. Health Net -- $ 194 million

The huge insurance company profits—BILLIONS EACH YEAR—could be used to provide quality healthcare for millions of people, and to pay physicians adequately for their work.

We need to get the insurance companies OUT of healthcare . The only solution is a NON-PROFIT SINGLE-PAYER HEALTHCARE SYSTEM – and the single payer should not be an insurance company or a group of insurance companies.

The solution? The United States National Health Insurance Act, H.R. 676. You can read about it here: http://www.healthcare-now.org/hr-676/

FOR MORE INFORMATION: http://www.insurancecompanyrules.org/learn_more/the_roster/ and http://www.pnhp.org/

Anonymous said...

WHO’S LOOKING AT THE COMPENSATION OF THE HEALTHCARE INSURANCE EXECUTIVES?

The health insurance companies have played a major role in our current healthcare crisis. They make huge profits and their CEOs make millions, while the rest of us are denied care.

ANNUAL COMPENSATION OF HEALTH INSURANCE COMPANY EXECUTIVES (2006 and 2007 figures):

• Ronald A. Williams, Chair/ CEO, Aetna Inc., $23,045,834
• H. Edward Hanway, Chair/ CEO, Cigna Corp, $30.16 million
• David B. Snow, Jr, Chair/ CEO, Medco Health, $21.76 million
• Michael B. MCallister, CEO, Humana Inc, $20.06 million
• Stephen J. Hemsley, CEO, UnitedHealth Group, $13,164,529
• Angela F. Braly, President/ CEO, Wellpoint, $9,094,771
• Dale B. Wolf, CEO, Coventry Health Care, $20.86 million
• Jay M. Gellert, President/ CEO, Health Net, $16.65 million
• William C. Van Faasen, Chairman, Blue Cross Blue Shield of Massachusetts, $3 million plus $16.4 million in retirement benefits
• Charlie Baker, President/ CEO, Harvard Pilgrim Health Care, $1.5 million
• James Roosevelt, Jr., CEO, Tufts Associated Health Plans, $1.3 million
• Cleve L. Killingsworth, President/CEO Blue Cross Blue Shield of Massachusetts, $3.6 million
• Raymond McCaskey, CEO, Health Care Service Corp (Blue Cross Blue Shield), $10.3 million
• Daniel P. McCartney, CEO, Healthcare Services Group, Inc, $ 1,061,513
• Daniel Loepp, CEO, Blue Cross Blue Shield of Michigan, $1,657,555
• Todd S. Farha, CEO, WellCare Health Plans, $5,270,825
• Michael F. Neidorff, CEO, Centene Corp, $8,750,751
• Daniel Loepp, CEO, Blue Cross Blue Shield of Michigan, $1,657,555
• Todd S. Farha, CEO, WellCare Health Plans, $5,270,825
• Michael F. Neidorff, CEO, Centene Corp, $8,750,751

This executive compensation could be used to provide quality healthcare for millions of Americans! We need to get the insurance companies and their lobbyists OUT of healthcare. NON-PROFIT, SINGLE-PAYER IS THE ONLY OPTION.

If you want to learn more, go to:
http://www.insurancecompanyrules.org/learn_more/the_roster/

Heraclitus said...

Biden might be an empty suit, but Earl Devaney, who will actually be chairman of the Recovery Act Transparency and Accountability Board, seems like a serious man:

http://www.swamppolitics.com/news/politics/blog/2009/02/obama_taps_sleuth_for_stimulus.html

Biden's role is more of a nebulous "coordinating" one and I don't expect him to add any substance to the Board's operation.

PhillipCharles said...

For what it is worth, I am very fond of our new VP. He is articulate, eloquent, candid and also refreshingly populist, especially when you consider at least the last four VPs of our country; a true man of the people. Maybe he does have 'Senatitis', but I think he truly cares about the fate of everyday Americans.

Anonymous said...

Socialism is alive and well in DC

VoiceOfReezon said...

We've seen what a wonderful job the government did with the post office, Social Security and Medicare. I'm sure they'll do the same with national health care.