Screwing up health care on two continents

THE LEADING corporate lobbyist against proposals for a "public option" in health care reform legislation helped waste billions of dollars introducing "free-market methods" in Britain's publicly run National Health Service (NHS).

Simon Stevens is UnitedHealth's chief lobbyist and is leading the company's fight against a public option that would establish a government-run alternative to provide coverage for some of the uninsured. As well as sitting on the UnitedHealth board, Stevens is chairman of the newly formed UnitedHealth Center for Health Reform and Modernization.

This means Stevens leads UnitedHealth's campaign against any meaningful reform of America's health care system, lobbying senators and leading public campaigns to stop any modernization threatening UnitedHealth's profits.

UnitedHealth hired Stevens in 2004 when he left his old job as chief health adviser to British Prime Minister Tony Blair. Stevens was the architect of Blair's market-oriented "reforms" of Britain's health service.

Britain's NHS is far more comprehensive and "socialistic" than the Obama administration's proposal for a public option. Founded by a reforming Labour Party government in 1945, it includes both automatic health care for all residents, funded through taxation, and state-run hospitals and clinics.

Tony Blair's market-oriented Labour government that took power in 1997 gave some NHS medical work to private firms. Stevens was central to these attempts to commercialize parts of the NHS. However, far from delivering more efficiency, the Stevens-backed plans have involved literally billions of dollars of waste on failing or underused systems. The market methods Stevens prescribes for the U.S. health service have already been found wanting in Britain.

Stevens was the main author of the "NHS Plan," which took medical procedures and operations away from publicly owned and run NHS hospitals, and handed them over to private companies. The plan was supposed to increase NHS efficiency through competition. However, profit-hungry firms and badly written contracts meant the private provision was more expensive and worse quality than that offered by publicly owned hospitals.

Under one part of the plan, the NHS gave up on buying their own MRI scanners, and instead paid a private company to do the scans from the back of trucks in hospital parking lots. Under the contract, the scanning company, called Alliance Medical, was paid for 133,000 scans over five years--even if the scans were not actually performed. This year, Britain's Health Department admitted that the firm only carried out around 80 percent of the work, so it was paid around $40 million for doing nothing.

More money was wasted because NHS doctors did not trust the quality of the scans: The Royal College Of Radiologists said that the firm's scans could be poor quality, needed to be double checked, or arrived late. The NHS Clinical Guardian agreed with many of these criticisms, and said that public-sector doctors needed to check the private companies work.

Another part of the plan meant that the NHS bought hundreds of thousands of minor operations from private clinics called "Independent Sector Treatment Centers." This "market reform" demonstrated the private sector was far less efficient than the public sector. Contracts paid private companies 15 percent more per operation than public-sector NHS operations. They also paid the firms whether the work was done or not. Estimates by Professor Alyson Pollock, an academic critic of the scheme, suggest up to $1.6 billion may have been wasted on phantom operations.

Stevens' lobbying in the U.S. is based on dubious lessons drawn from his UK work.

Barack Obama made his case for reform very much on cost grounds--he said he hoped a public option would, by competing with greedy health insurers, force down costs. Stevens claims that private insurers like UnitedHealth can cut costs themselves. In particular, Stevens briefed senators that the introduction of new computer systems could cut U.S. health care costs by $332 billion.

Yet Stevens "market reform" of the British NHS included a computer system called "NHS Connecting for Health," a program that cost around $20 billion, yet is barely effective.

Stevens was at the meeting that launched Connecting for Health, a suite of computer systems that were supposed to create electronic patient records and bookings,, and in the process allow private contractors to be levered into public health provision. The program launched in 2002, was supposed to cost around $3 billion and be ready in three years. Instead, the UK National Audit Office estimates it will cost close to $20 billion and won't be ready for 10 years. Bad management of private contractors when Stevens was Blair's chief health adviser means the system is still ineffective.

Incredibly, in an article for Britain's Health Service Journal about Obama's reforms Stevens argued "just about everyone agrees the U.S. needs proper electronic health record systems, and Connecting for Health provides rich insights on the problems that stand in the way of doing so on a comprehensive national basis."

DESPITE HIS involvement in these public-sector losses, Stevens has apparently been a very effective lobbyist for Untied Health.

The "blue dog" group of conservative Democrats helped start the resistance to a public option. Before they did, in March, "UnitedHealth Group participated in a roundtable discussion with members of the House Blue Dog coalition, a group of influential, conservative Democrats in the House of Representatives," according to a company statement. "UnitedHealth Group, represented by Executive Vice President Simon Stevens, was the only insurance company invited to participate." UnitedHealth added that it was "invited back for further discussions surrounding specific policy proposals and issues within the health care reform debate."

After the "blue dogs" threw a roadblock in the way of the public option, the Obama administration turned to negotiations in the Senate to rescue some form of health reform. The Senate Finance Committee, chaired by Sen. Max Baucus, is the focus of these negotiations.

Stevens went to lobby Sen. Kent Conrad, a key member of the Finance Committee, in late May. Soon after Stevens' visit, Conrad declared that the public option was "dead." The announcement by this influential moderate senator that Obama must drop his public option or see his entire health reform fail was a major blow to the proposal for expanded state health insurance, though Democrats appear to be considering a proposal for a highly restricted public option again.

Conrad used a diversionary tactic to attempt to kill off the public option, claiming that "cooperatives" could provide coverage to the uninsured, rather than a government-run public option. This cooperatives proposal is likely to be unworkable, but the proposal means Conrad can claim not to be simply working for the private health care industry.

While Conrad claims the idea is his own, it is similar to maneuvers that Stevens made in Britain--while Stevens' health-sector "reforms" invariably helped profiteering private firms, he often argued that new providers would be a "third sector" or "cooperatives" or charitable organizations.

UnitedHealth has spent over $2.5 million lobbying Congress this year, teaming Stevens with their other lobbyist, Tom Daschle, the former leader of the Democrats in the Senate.

WHILE STEVENS is lobbying against the public option in the U.S., in a striking piece of corporate hypocrisy, his firm is lobbying for work with the publicly run NHS in Britain. Indeed, UnitedHealth originally hired Stevens to help them win NHS contracts.

In America, under Stevens' lead, UnitedHealth claims that any moves toward a government-run plan would be disastrous, but in Britain, the firm is desperate to squeeze a slice of business from the government-run NHS. In the UK, the company describes itself as "working in partnership with the NHS." Its brochures claim it is "a rapidly growing company focused on improving the NHS."

In the U.S., UnitedHealth has been mobilizing popular support against the public option with a self-interested "astroturf" campaign that purports to be grassroots. In Britain, a genuine popular campaign mobilized against UnitedHealth's inroads into the NHS--grassroots protests hobbled UnitedHealth's first attempt to break into the UK's NHS.

In Britain, general practitioners (GPs) are at the frontline of the National Health Service. These doctors are small independent practitioners who work mostly for the NHS. UnitedHealth wanted to create a new model of multinational corporations providing GP services through "polyclinics" across a region, with a trial run in former mining towns in Derbyshire.

However, a fierce local campaign lost the company one of its contracts last year. UnitedHealth is currently bidding to run similar GP services across North London, but it again faces a public campaign that includes local residents, labor unions and a former Labour Party Health Minister.

Campaigners in Britain don't believe that UnitedHealth is a good partner for the publicly delivered NHS. This is hardly surprising given the firm's aggressive stance against Obama's much weaker public option.

UnitedHealth organized its staff to go to the "town hall" meetings where protesters attacked Obama's reforms as "socialist," and as "bad" as our NHS. UnitedHealth wrote a letter to all its employees telling them to "call the United for Health reform advocacy hotline" to "speak with an advocacy specialist" about Obama's reforms. The letter suggested writing to their congressman. UnitedHealth recommended "working with an advocacy specialist to personalize your message." It also said staff should be "attending a town hall meeting" on healthThe letter warned that "YOU MAY BE CONTACTED during business hours" by the "advocacy team" and encouraged to go to a "town hall meeting."

UnitedHealth claims to be neutral about Obama's reforms, but their "talking points" given to staff mobilized for town hall meetings says: "A government run health plan would be a roadblock to meaningful healthcare reform."

UnitedHealth also funds another front group organizing protests at the town hall meetings--the Campaign for an American Solution, which is fighting against Obama using a public option in health care. According to this campaign's publicity materials, a "government-run plan" would suck thousands of dollars out of Americans' wallets, while simultaneously slashing spending on hospitals by 30 percent.