Llewellyn

King

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April 9, 2009

Defense Contractors, Health Insurers: Now Meet Those Too Big To Be Denied

We have all heard about “too big to fail.” How about “too big to be denied?”

Step forward two commercial sectors that are certain to get in the way of President Barack Obama's reform plans – the nation's health insurers and its defense contractors.

The former are bound and determined to hold their lucrative position in any extension of health coverage to the uninsured. In this way, a new health agenda will be designed as much to accommodate the insurers as the patients and providers.

Likewise, as Defense Secretary Robert Gates struggles to reform defense procurement and to cancel some weapons systems, he has to deal with the massive power of the defense giants. In defense, the customer is always wrong. The vendors, through their congressional sponsors, overwhelm the department and get what they want, not what field commanders need or what the national interest cries out for.

Ironically the Clinton Administration strengthened the defense lobby, and its ability to push around the Pentagon, by orchestrating the consolidation of defense contractors into a few behemoths, as part of the downsizing of the military in the 1990s. Norman Augustine, chairman and CEO of Lockheed Martin from 1995-97, told me that during his tenure, Lockheed Martin had absorbed 19 small contractors.

The big contractors of today – Boeing, Lockheed Martin, General Dynamics, Raytheon, Northrup Grumman, BAE and the European wannabe EADS – have conscientiously scattered their manufacturing among many states. One program has components made in 44 states. That means jobs, and jobs mean political clout.

The health insurers, who succeeded in sinking the Clinton health care reform effort, are ready for some concessions –but only enough to ensure their dominance. The health insurers and their conservative allies are experts in predicting the arrival of creeping socialism, unless the private insurers retain their supremacy in financing and profiting from the health care system. Ironically, they claim any larger government role in health care will lead to rationing. Yet it is the insurers who ration health care now, and if you are in an HMO they ration it severely, cruelly and sometimes lethally.

A favorite argument is that health care reform will substitute the judgment of doctors for the judgment of bureaucrats. One of the more appalling aspects of the current situation is that the insurance companies day to day substitute the judgment of clerks for that of doctors.

The health insurers will not be denied, but they feel it is reasonable to deny the evidence against them. When health care was in the operating theater in the 1990s, and Hillary Clinton was poised to plunge in the scalpel, the insurers rose up against anyone who had evidence that the system was serving the companies, not medicine and not patients. They succeeded in banning from the debate what they dismissed as “anecdotal evidence.” They wanted the debate discussed on a level where they could dismiss reports of their own shortcomings, and conduct the debate in terms of capitalism versus socialism.

It is only now, with business crying out for reform, that the issue is being aired again.

My anecdotal evidence is this: I have lived under government-run medicine in England. It works well enough. The young are favored over the old there, whereas here the old are favored over the young. Now I am on Medicare, which is remarkably like being on the National Health Service in Britain, except I am being favored over the young.

For 33 years, I ran my own publishing company in Washington. After payroll, the biggest expense was health care. To keep the cost down we changed the carrier frequently, to everyone's inconvenience and a lack of continuity. When one employee had a rare and painful cancer, the insurance company paid for radiation and chemotherapy but denied payment for painkillers.

For years, AT&T ran the telephone system and ordained that plugging in a phone could not be performed by a customer, and that black instruments were all that should be offered. They were, they thought, too big to be denied.

Robert Gates has shown guts in trying to deny the oligarchs of defense. Congress will need bravery in denying rent-takers in health care. Meanwhile, those who are too-big-to-be-denied are pumping dollars into Washington's K Street, where the lobbyists carry their water.

© 2009 North Star Writers Group. May not be republished without permission.

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