"Nonprofit" Corruption

A revealing article, dubbed wonkishly enough “The Pennsylvania Community Health Reinvestment Agreement”: http://www.statecoverage.net/pdf/monograph0806.pdf

This article provides an overview of one of the many, many problems with a private health care system. Here we see the many opportunities for corruption available to the insurers that enjoy non-profit status, Blue Cross/Blue Shield.

The historical roots of Blue Cross/Blue Shield are in the efforts of the AMA to maintain “provider sovereignty”–that is, to prevent the majority of Americans from access to health care, so that the health care market would be calibrated to the incomes/wealth of the most affluent Americans, thus maintaining medical doctors’ financial elitism in addition to their elite status.

It should be made clear to non-Americans that Blue Cross/Blue Shield do not primarily service needy populations.

These insurers’ unregulated status makes public accountability impossible, as this article demonstrates.

Blue Cross/Blue Shield provide an excellent case of the widespread corruption and inefficiency that dominates US businesses via “creative” accounting. They went from no reserves to pay claims in the 1980s and 1990s–when they poured insurance income into outrageous golf junkets and Paris headquarters–to a new amassing of massive wealth at the public and social expense. While companies and individuals paying for health insurance fork over ever higher premiums for the “confidential” ends of the private healthcare insurers, this wealth has been dedicated to ridiculously high executive salaries, the retention of armies of ridiculously overpaid legal firms, and political lobbying.

In exchange for minimal and insecure commitments to low-income health insurance subsidization (covering 100,000 people), the Pennsylvania Agreement effectively relieves these unaccountable companies and their for-profit subsidiaries from contributing to the public welfare through taxation. Crazily enough, the PA Community Investment Agreement appears to be the very best the privatized US health care system can do to provide health care coverage. It is hailed as a cutting-edge model for states hoping to cope with the devastating health care crisis. For in most states, governments have no ability to regulate these “nonprofit” monsters.

And by regulate, I mean to say: Governments have no ability to determine whether a nonprofit is acting in any “benevolent” (as opposed to bilking) manner whatsoever. They have no access to information about rates and expenditures. This brings into question the whole point of even having a “nonprofit” category in public governance. Since its a capitalist country, why assume that any private business is “benevolent” at all? Blue Cross/Blue Shield themselves deny it! Here is the reason for the “nonprofit” category in the US: It’s an avenue for graft.

Blue Cross/Blue Shield are a clear cut case that privatized health care is socially inefficient and socially damaging.

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